Trivial Benefits

What gifts can I give to my employees?

As 2021 comes to an end you may be thinking about making a gift to your employees.

You don’t have to pay tax on a benefit for your employee if ALL of the following conditions apply:
1. Cost you £50 or less to provide
2. It is not cash or a cash voucher
3. It is not a reward for their work or performance
4. It is not part of their contract

This is known as a ‘trivial benefit’. You don’t need to pay tax or National Insurance or let HM Revenue and Customs know.

Importantly, you have to pay tax on any benefits that don’t meet all these criteria.

For the Directors – You cannot receive trivial benefits worth more than £300 in a tax year if you are the director of a ‘close’ company. A close company is a limited company that’s run by 5 or fewer shareholders.

Shaw Austin are Chartered Accountants based from Chester that support independent business in North Wales, Cheshire and The Wirral. This information is correct at the date of publishing and further updates can be found here