Trivial benefits for your team!
We don’t think Giving a tree is Trivial and your team will love our gifts!
What the law says;
You don’t have to pay tax on a benefit for your employee if all of the following apply:
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 isn’t in the terms 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 (HMRC) know.
What we offer!
Give the gift of 4 trees for £50
Or speak with us about something else for the team!
Ask about our CSR & ESG!
You have to pay tax on any benefits that don’t meet all these criteria.
If you’re not sure whether a benefit counts as a trivial benefit call the employer helpline.
Salary sacrifice arrangements
If you provide trivial benefits as part of a salary sacrifice arrangement they won’t be exempt. You’ll need to report on form P11D whichever amount is higher:
the salary given up
how much you paid for the trivial benefits
These rules don’t apply to arrangements made before 6 April 2017 - check when the rules will change.
Directors of ‘close’ companies
You can’t receive trivial benefits worth more than £300 in a tax year if you’re the director of a ‘close’ company.
A close company is a limited company that’s run by 5 or fewer shareholders.
Tax on trivial benefits - GOV.UK (www.gov.uk)
How to treat yourself and your employees tax free!
Thanks to Rosslyn Associates
Are you a business owner who gives employees gifts and benefits to celebrate birthdays or other special occasions? Before the new rules on trivial benefits came into effect in 2016, you would normally have had to pay national insurance on gifts to employees, and your employees themselves would have also paid income tax on their gift.
However, things have changed. The exemption for trivial benefits could now potentially save you tax. For a benefit to be a tax and national insurance free expense, it must comply with a number of rules.
Trivial benefits are usually things like meals out, staff parties and gifts given to employees for special occasions such as birthdays, weddings, Christmas etc. It should be remembered that any benefits given must not be a reward for a job well done.
There is also a separate annual allowance for staff social functions and parties. There are rules for this too. If the party is available for every employee to attend, it’s an annual event and it costs no more than £150 per head, then there is no tax or national insurance to pay. The trivial benefits exemption means staff entertaining that falls out with the rules of annual staff social functions and parties can be claimed as a tax-free expense, if it complies with the rules for trivial benefits. For example, you could hold an annual staff party at £150 per head and also treat employees throughout the year to additional social events up to £50.
Benefit to employers
Employers who often give their staff gifts or spend more than the annual limit for staff social functions and parties will save tax on giving their employees benefits as they are exempt from tax and national insurance contributions. As a director, you can also treat yourself through the company every so often, with no tax to pay, as long as the rules above are met. The exemption means that employees will also have no tax to pay. Previously a P11D form would need to be submitted, with details of benefits and the employee would pay income tax. This is now not the case and any benefits that follow the above rules are tax free to employees.