Let’s get trivial

19th June 2019

Trivial benefits are exempt from income tax and Class 1A NIC and therefore not reportable on a P11D. With the P11D deadline of 6th July fast approaching, I thought now would be the perfect time to review exactly what criteria needs to be met in order to qualify as ‘trivial’.

Benefits are exempt from tax and NICs if all of the following apply:

  • the cost to the employer is £50 or less, including VAT
  • it isn’t a cash or a cash voucher (if it is, then this is classed as salary and should go through the payroll)
  • it isn’t a reward for the employees work or performance
  • it isn’t included in the employees contract

All of the above must be met for something to be counted as a trivial benefit.

However, there is an annual cap of £300 for directors of a close company and members of their family. If this limit is exceeded, then the benefits become taxable and must be reported to H M Revenue & Customs.

It is essential that employers keep an accurate, detailed record of any gifts made to staff or any staff entertaining. This will ensure that benefits can be accurately assessed, calculated and reported.

Further details can be found on HMRC’s website here: https://www.gov.uk/expenses-and-benefits-trivial-benefits

If you require any assistance with any of the matters covered then please contact your usual Whiting & Partners contact or your local office.

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