We get asked a lot about Trivial Benefits, as HMRC has specific guidance surrounding amounts you can pay to your employees, which won’t attract tax issues for you or them.
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 (very useful during lockdown!)
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
- Get in touch with the team today if you’re not sure what counts as a trivial benefit, or book in a 30 minute specialist advice call with Sharon.