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Tax on trivial benefits

You do not have to pay tax on a benefit for your employee if all of the following apply:

  • it cost you £50 or less to provide
  • it’s not cash or a cash voucher
  • it’s not a reward for their work or performance
  • it’s not in the terms of their contract

This is known as a ‘trivial benefit’. You do not need to pay tax or National Insurance or let HM Revenue and Customs (HMRC) know.

You have to pay tax on any benefits that do not meet all these criteria.

If you’re not sure whether a benefit counts as a trivial benefit call the employer helpline.

Salary sacrifice arrangements

If you provide trivial benefits as part of a salary sacrifice arrangement they’ll not be exempt. You’ll need to report on form P11D whichever amount is higher:

  • the salary given up
  • how much you paid for the trivial benefits

Directors of ‘close’ companies

You cannot receive trivial benefits worth more than £300 in a tax year if you’re the director of a ‘close’ company.

A close company is a limited company that’s run by 5 or fewer shareholders.

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