Trivial Benefits

As a limited company director, there may be instances where you wish to treat your employees. And the good news is there may be instances where this will not be treated as a taxable benefit, as long as it meets certain requirements.

If you’re looking for a way to provide tax-free gifts to staff, our guide to trivial benefits outlines all you need to know.

What is a trivial benefit?

A trivial benefit is a tax-free gift which an employer can gift to the employees 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.

Can I claim a cost as a trivial benefit?

Unsure whether the cost is allowed? Answer the questions below for reference:

If the answer to any of the above questions is yes, the benefit will be treated as a taxable benefit.

If the answer to the above questions is no, this means the cost will qualify as a ‘trivial benefit’: in this instance, you don’t need to inform HMRC, the benefit won’t be subject to tax and National Insurance contributions and won’t need to be declared on a P11D form.

What is a close company?

A close company is one with five or fewer ‘participators’ or a company which all participators also act as directors. A participator is any party who has a financial obligation in the limited company.

Is there a limit on trivial benefits?

If you are the director of a close company you can still receive trivial benefits. However, they are capped to £300 per director per year.

What counts as a trivial benefit?

The following examples can be counted as a trivial benefit and therefore will not be liable for tax:

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