An employer can provide Trivial Benefits to their employees and directors without incurring a tax charge. This means as an employer you can provide your staff, or your limited company can provide its staff and or directors with gifts of up to £50 each without a tax liability arising. Multiple £50 gifts can be given during the tax year.
If the benefit is provided to a director or other office holder of a family run company, the exemption is capped at £300 in the tax year. So in essence, HMRC allow tax relief on six £50 gifts each tax year.
From HMRCs perspective, a benefit is exempt from tax if all of the following conditions are satisfied:
- The cost of providing the benefit does not exceed £50
- The benefit is not cash or convertible into cash. Gift cards are OK as long as they are not exchangeable for cash
- The employee or director is not entitled to the benefit as part of any contractual obligation
- The benefit is not provided in recognition of particular services performed by the employee as part of their employment duties