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HMRC internal manual

PAYE Settlement Agreements

Overview of PAYE Settlement Agreements: Trivial benefits

An employer may ask you to treat a benefit as exempt from tax on the grounds that the cash equivalent (Section 203(1) ITEPA 2003) of the benefit taxable on the employee(s) is so trivial it is not worth pursuing.

For instance a seasonal gift from an employer to their employees at Christmas of a turkey,a box of chocolates or a bottle of wine should be regarded as trivial, regardless of the number of employees involved and the overall cost to the employer. There is no requirement for an employer to return these benefits on form P11D.

It follows that where it is considered that such items are trivial benefits they must not be included in a PSA.

For further guidance on the subject of trivial benefits see EIM21860 onwards.