Particular benefits: exemption for trivial benefits – relationship with other exemptions (from 6 April 2016)
Section 323A ITEPA 2003
Note: this guidance has effect for benefits provided from 6 April 2016 onwards. For guidance on HMRC’s approach to trivial benefits for tax years 2015 to 2016 and earlier, see EIM21860.
Where a benefit is covered both by the trivial benefits exemption and also by another exemption, in applying the trivial benefits exemption, you should apply the outcome that is most favourable to the employee.
Employer S provides its employees with two annual functions at Christmas and in the summer. The first function costs the employer £140 per head and the second costs £40. The first function is covered by the annual parties and functions exemption under section 264 ITEPA. The second function is not covered by that exemption because the financial limit of £150 has been exceeded by the combined total of the two events. However, the second function can be covered by the trivial benefits exemption because the cost did not exceed £50.
If an existing exemption exempts only part of a benefit, even if the excess cost is less than the trivial benefit monetary limit, that excess is not exempt.
Employer T provides its employees with an annual function at Christmas that costs it £180. The benefit is not exempt under the annual parties and functions exemption under section 264 ITEPA because the cost of £180 exceeds the financial limit for the exemption of £150. Nor is the benefit covered by the trivial benefits exemption because the cost of £180 exceeds the trivial benefit financial limit of £50.
Employer U provides its employees with access in the workplace to tea, coffee or water from a cooling dispenser. If this refreshment is available generally to all employees, the benefit is exempt from charge under the subsidised meals exemption at section 317 ITEPA (EIM21670). If the exemption does not apply, you should accept that these refreshments represent a trivial benefit. However, see example E in EIM21868 where a working lunch is provided.