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HMRC Trivial benefits allowance

A less well known but handy HMRC ‘allowance’ comes in the form of a trivial benefit.

What is a trivial benefit and how does it benefit my business?

Trivial benefits can be described as small ‘token gifts’, given by management to their employees (including to the directors). Typically these come in the form of things such as bottles of wine, chocolates, beer for the office, or team lunches. Essentially everyday expenses which keep the team motivated and morale high.

Unlike other benefits provided to employees and directors such as company cars or gym memberships, trivial benefits do not need to be reported to HMRC and there are no negative tax implications of providing these to your employees.

What conditions need to met for a benefit to qualify?

You don’t have to pay tax on a benefit for your employee if all of the following apply:

  • it cost you £50 or less to provide
  • it isn’t cash or a cash voucher
  • it isn’t a reward for their work or performance
  • it isn’t in the terms of their contract

An albeit small benefit however something useful to know when you want to keep your team happy without bothering the tax man!