Trivial benefits are tax exempt (i.e. no income tax or NIC is due either on employer or employee) provided the following conditions are met each time the trivial benefit is given:
- Amount should be a maximum of £50 per employee
- Should not be in the form of cash or a cash voucher
- Should not be part of a contractual agreement with the employee
- Should not be offered as a reward for work performance.
There is no limit of how many trivial benefits can be offered to every employee in a year, however there is a cap of £300 per year for directors and their family members.
Also trivial benefits does not need to be given to ALL employees.
Examples of Trivial Benefits:
- Meal out offered for special events (e.g. birthday party for an employee)
- Turkeys offered on Christmas for each employee, provided the average price is maximum £50 per employee or equivalent vegan vouchers for vegan employees
- Bottles of wine offered for New Year, or vouchers for non-alcoholic drinks for those who do not drink alcohol.
Examples of non- trivial benefits:
- Boss offering lunch to some employee who are over working in their lunch break, for the reason of finishing their tasks quicker. These are reward lunches, not trivial benefits.
- Boss offering vouchers every month to those employee who meet or exceed their targets. Theses are awards, not trivial benefits.
- Other work-related examples:
- lunches in workshops/seminars
- month end drinks
- monthly meeting lunches/buffets
- retirement party for the employee who retires (as this is a reward for his working years); Note: other employees can get a trivial benefit attending this party of their retiring colleague.
Please note in above instances other exemptions may apply.
Same benefit multiple times:
Multiple of the same trivial benefit is considered as one, with a cap of £50 per employee (e.g. boss offering sandwiches every week say of £3 each . So total equals £3 x 52 = £156 thus exceeds £50 limit)
Employers should keep clear records of Trivial Benefits – Dates, details and Amounts