Learn in this article how to provide your team with some festive cheer and financial reward throughout the year in a tax efficient way.
Trivial benefits are a way in which you can reward members of your team without incurring any tax liabilities for the employee.
As an employer you can provide your employees with benefits not exceeding £50 (including VAT), free of tax or any reporting requirements.
The standard way to reward your employee is to give them a voucher which cannot be exchanged for cash. The employee must not be entitled to the reward as specified in their employment contract or as part of a salary sacrifice arrangement. The benefit cannot be in recognition of a particular service performed.
The team member can receive multiple trivial benefits throughout the year so long as none of them exceed £50 and the total cost per employee in the tax year does not exceed £300.
In addition to vouchers, H.M. Revenue & Customs give examples of other trivial benefits, such as: –
- Meals provided for a group of employees to celebrate a birthday or anniversary
- Buying employees a birthday or Christmas present
- A summer garden party for employees
In the case of any of the above, the value of the benefit per employee must not exceed £50.
