Are you taking advantage of the so-called Trivial Benefits rules? You may not be aware, but it’s possible to make small tax-free gifts and entertainment to employees, including directors. Here are the rules:

  • The benefit must cost you less than £50 to provide
  • It can’t be cash or a cash voucher
  • It mustn’t be related to their performance or a reward for their work
  • It mustn’t be included within the terms of their contract

Benefits provided to employees that meet the above criteria are classed as trivial benefits, and they can be provided tax free to employees. You can provide up to £300 worth of trivial benefits per employee, per tax year.

Be careful not to spend one penny more than £50, otherwise the full value of the benefit will be taxable!

If you are a director, you can also receive trivial benefits, as well as providing these to family members. The above conditions still apply as does the annual cap of £300. Benefits to family members who are not directors will be included within your directors’ allowance for the year.

So, what can you give?

Providing it’s not cash, the gift can be anything, as long as the cost is no more than £50 per head. Examples include store gift cards, flowers, chocolates, wine, hampers and even taking staff out for a meal.

The trivial benefits are in addition to the annual staff entertaining allowance of £150 per annum, per attendee.

So, what are you waiting for? Go on and treat yourself! Every little helps!