An exemption was introduced in April 2016, meaning that ‘trivial benefits’ costing £50 or less are no longer required to be reported as taxable benefits on a form P11D at the end of the tax year.
An employer can therefore now provide trivial benefits such as wine, flowers or a meal out without any tax or national insurance for either the employer or the employee.
The three conditions that must be met for the exemption to apply are:
· The trivial benefit must not cost more than £50;
· It must not be a reward for services or in any way contractual;
· It must not be cash or a cash voucher (but can be a gift card, which cannot be exchanged for cash).
There is an annual cap of £300 for trivial benefits provided to directors and other office holders of close companies (including members of their families and household).
For further information, please see your accountant or financial advisor.