Don’t forget those trivial benefits

Posted on 5th December 2022 by Streets - Employment & Payroll

Don’t forget to take advantage of tax-free trivial benefits. If you are an employer and looking to give your employees a small token of appreciation then your best option is probably to give them a gift. In order to ensure that this is not a taxable gift, it is important to ensure that the trivial benefits in kind (BiK) rules apply.

There is no tax to pay on trivial benefits in kind (BiK) provided to employees where all of the following apply:

the benefit is not cash or a cash-voucher; and
costs £50 or less; and
is not provided as part of a salary sacrifice or other contractual arrangement; and
is not provided in recognition of services performed by the employee as part of their employment, or in anticipation of such services.

So, for example a food gift that costs £45 would qualify as would a £15 bottle of wine. It is also possible to provide employees with a gift voucher (not a cash-voucher) where the value is £50 or less. It is important to remember that the gifts must not be provided in recognition of the employees’ services but merely as a gesture of goodwill.

There is an annual cap for directors of a ‘close’ company of £300 per year. If the gifts have a value of over £50 or cannot be counted as a trivial benefit, then the gift must be reported on form P11D and Class 1A NICs will be payable on the value of the gift.

No Advice

The content produced and presented by Streets is for general guidance and informational purposes only. It should not be construed as legal, tax, investment, financial or other advice. Furthermore, it should not be considered a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset. The information provided by Streets is of a general nature and is not specific for any individual or entity. Appropriate and tailored advice or independent research should be obtained before making any such decisions. Streets does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of obtaining Streets' visual or audible content.

Information

The content used by Streets has been obtained from or is based on sources that we believe to be accurate and reliable. Although reasonable care has been taken in gathering the necessary information, we cannot guarantee the accuracy or completeness of any information we publish and we accept no liability for any errors or omissions in material. You should always seek specific advice prior to making any investment, legal or tax decisions.