Trivial Benefits: What are they and what are the rules?

New rules were introduced in the 2016/17 tax year which allow up to £300 of trivial benefits per employee/director tax free.

Trivial benefits: The Rules

The rules for these benefits are as follows:

• the cost of providing each individual benefit should not exceed £50
• the benefit is not cash or a cash voucher
• the employee is not entitled to the benefit as part of any contractual obligation (including under salary sacrifice arrangements)
• the benefit is not provided in recognition of particular services performed by the employee as part of their employment duties (or in anticipation of such services)
  

If any benefit provided goes over £50 then it must be reported on a P11d.

The limit is per employee/director (or officer) so both husband and wife can receive up to £300 of ‘trivial’ benefits if they are a director or secretary for the company.

Trivial Benefits: Examples

There is no definition of what is a ‘trivial’ benefit but would include the following:

• a meal out to celebrate a birthday
• a turkey at Christmas
• a bottle or two of wine
• coffee and tea provided at work
  

The benefit can be applied to the director or a member of their household. The definition of a member of their household is as follows:

• spouse (or civil partner)
• children and their spouses (or civil partner)
• parents
• domestic staff, dependants and guests

So if you and your spouse are directors of the company, you and your two children could go out for a meal costing up to £50 per head and £100 would be applied to you and £100 to your spouse – this would leave another £200 allowance each.

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