What is a Trivial Benefit?

What is a trivial benefit? We get asked a lot about this, as a trivial benefit won’t attract tax for you or your employees. So it’s a good way to reward your team.

So what is a trivial benefit?

  • Trivial benefits are payments to your team, and have to be under £50 each time.
  • They can’t be to reward employees for performance, can’t be working lunches, and shouldn’t be cash or vouchers.

What counts as a trivial benefit?

  • 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’s not in the terms of their contract
  • it can’t be a working lunch

If it is any of these things, then it is a taxable benefit in kind, and needs to be reported each tax year on a P11D.

Examples of trivial benefits:

  • Sending gifts or flowers to team members for birthdays or celebrations
  • Taking the team for lunch or a night out
  • Getting treats delivered to the office
  • Arranging food deliveries to team members’ homes

What about company directors?

  • You can still receive trivial benefits if you’re a director of your own company.
  • But you’re restricted to £300 per tax year.

What’s a P11D?

We have created a separate blog on P11Ds that goes into more detail, but here’s a quick overview:

A P11D is a report each tax year to HMRC, and includes taxable benefits and expenses your employee might have received.

These could include:

  • motor vehicles for private use
  • fuel for your vehicle
  • mileage paid above HMRC’s approved rates
  • private medical treatment or insurance
  • interest free and low interest loans above £10,000
  • anything that isn’t a trivial benefit

What next?

  • Get in touch with the team today if you’re not sure what counts as a trivial benefit.