As the end of the year approaches, you may be looking for ways to thank your team for their hard work and dedication. Whether it’s a small “thank you” or a festive treat, did you know there are tax-free ways to give perks to your employees? This is where trivial benefits come in.
Trivial benefits are a tax-efficient way to boost staff morale with small, meaningful gifts, all without triggering a tax or National Insurance bill for you or your employees. Let’s take a closer look at how they work and what qualifies.
What Are Trivial Benefits?
Trivial benefits are just as they sound—small, low-value gifts or perks. Under HMRC rules, businesses can offer employees benefits worth £50 or less, and if they meet the criteria, there’s no tax or National Insurance to pay on them.
To qualify, the perk must be:
Less than £50 in value (including VAT)
Not cash or a cash voucher (gift vouchers are fine as long as they’re not exchangeable for cash)
Not given as a reward for work or performance
Not part of the employee's contract or regular benefits
So, if you gift your team members a box of chocolates or a gift card to their favourite coffee shop that fits the above criteria, you’re all set!
Examples of Trivial Benefits
Here are some examples of suitable trivial benefits under the £50 limit:
A bottle of wine or festive treats
A gift voucher
A bouquet of flowers
Tickets to a local event
These simple gestures show appreciation without creating tax headaches. Just remember, the gift must not be contractually required or tied to performance.
Watch the Limit!
One key point: the £50 limit applies to each individual benefit, not a yearly cap. This means you can give multiple trivial benefits throughout the year as long as each one is under £50. For example, you could treat your team to a meal for their birthday and then give them something else during the holidays. However, if a gift exceeds £50, it won’t qualify as a trivial benefit, and you’ll need to pay tax and National Insurance on the entire value, not just the amount over £50.
Trivial Benefits for Directors: What You Need to Know
Directors of limited companies with fewer than five shareholders can also benefit from trivial benefits, but there’s an annual limit of £300 for trivial benefits given to directors or their family members. This allows directors to enjoy perks within a modest limit.
For example, as a director, you could give yourself or a family member four £50 gifts throughout the year, and as long as the total doesn’t exceed £300, no tax is due.
Why Trivial Benefits Matter for Businesses
Using trivial benefits can help create a positive workplace culture on a budget. Small perks make employees feel valued, which boosts morale, improves job satisfaction, and can even enhance retention.
From a financial perspective, trivial benefits offer a smart way to reward staff without the added tax cost. Plus, as long as they’re documented, trivial benefits shouldn’t add any extra complexity to your bookkeeping.
Keeping Trivial Benefits on Track
While trivial benefits are easy to give, it’s essential to track them properly. Here’s how:
Keep receipts for all benefits provided and confirm each is under £50.
Record the details of the gift, including the date and recipient.
Make sure each benefit meets the criteria—no cash or performance-related gifts.
Accurate records ensure compliance with HMRC rules, should you ever need to provide documentation.
Trivial benefits may seem small, but they can make a big impact on team morale—and your business’s tax efficiency! Thoughtful, low-cost perks show appreciation and keep your accounts in good shape.
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