Did you know there are ways to give small gifts that are completely tax-free for both you and your employees? Here is a simple guide to trivial benefits.
What Are Trivial Benefits?
Trivial benefits are small perks that do not attract tax or National Insurance. They also do not need to be reported to HMRC, as long as they meet the following rules:
The gift must cost £50 or less per person.
It cannot be cash or a cash voucher (A cash voucher is defined as any voucher, stamp or similar document capable of being exchanged for a sum of money that is greater than, equal to or not substantially less than the expense incurred in providing the voucher by the person who provides it – gift cards are usually not exchangeable for cash therefore are not cash vouchers).
It should not be given as a reward for work or performance.
It cannot be part of the employee’s contract.
Gift Ideas That Qualify
Here are some simple gift ideas that fall under the trivial benefits rules:
A box of chocolates, festive biscuits, or a bottle of wine.
A gift card for a coffee shop, supermarket or Amazon up to £50 (as long as it is not cash).
A small seasonal hamper.
Tickets to a festive activity like a light show or ice skating.
For company directors, the annual limit for trivial benefits is £300 if you run a close company (5 or fewer shareholders), so you can also treat yourself within the rules.
What to Avoid
Cash or Bonuses: These are always taxable.
Gifts over £50: If the cost exceeds £50 (even by a penny), it no longer qualifies as a trivial benefit and becomes taxable.
Trivial benefits are a simple way to show appreciation while keeping things tax-efficient. A thoughtful, small gesture can go a long way!
