Trivial benefit expenses
A trivial benefit is a tax-free gift which an employer can gift to employees or directors on an occasional basis.
In order to be exempt from tax and National Insurance contributions, the cost must follow a specific set of criteria for directors of close companies.
A close company is a limited company run by 5 or fewer shareholders.
What does not qualify as a trivial benefit?
If the answer to any of the questions below is yes then the claim does not qualify as a trivial benefit:
- Is the cost of the benefit greater than £50?
- Is the benefit cash or a cash voucher?
- Is the employee entitled to the benefit as part of a contractual obligation?
- Is the benefit provided as a reward or recognition for achievement?
What are the limits?
The annual limit is £300 per director per year but with each individual benefit being no more than £50.00.
You will of course need to keep all normal records of purchase such as the receipts.