The Facts!
Trivial Benefits are best described as a small token or gift given by management to their employees.
These can be ‘unlimited’ for employees in the year and could be:
- Pizza on a Friday afternoon.
- A summer party
- Christmas present for an employee
- Flowers for a staff member on the birth of a baby
- Taking a group of employees out for a meal to celebrate a birthday
- Gesture of goodwill
Trivial benefits are not:
- Long service awards
- Thank you gifts
- Given in recognition for work or as part of the contractual obligation
For the benefit to be trivial, it needs to satisfy all the conditions below:
- Average cost per employee must not exceed £50
- The cost of the benefit must not exceed £50
- Must not be cash or a cash voucher
And most importantly it must not be expected, or a reward for work or performance!
The £50 limit for a Trivial Benefit is NOT an allowance – the amount recognised for the trivial benefit is the amount actually spent.
The Benefits!
Trivial benefits do not only benefit the employees but can also be very beneficial for the employers and business owners, for example:
- If your business is VAT registered, you can use the input tax to reduce your next VAT liability – provided that the benefit is standard rated saving you money
- Benefits for the staff will help to boost their happiness and wellbeing increasing motivation and efficiency
- The Trivial Benefits will reduce your profits and your taxes saving you money in the long run
Directors Trivial Benefits Cap
Directors, have an annual spend cap of £300 – this cap can also be used for family members of directors, and the office holders. If this is divided each month then the director could spend £25 a month on trivial benefits, or £50 every two months.
Trivial Benefits can be food/drinks/alcohol so this is not to be confused with the tax implications of buying gifts where this would not be allowable.
More resources are available through HMRC website:
https://www.gov.uk/expenses-and-benefits-trivial-benefits
However, JSR would be delighted to discuss trivial benefits with you and the impact they can or do have on your business. Call us today or fill in a contact form and we can set you up a free, no obligation consultation.
