Jun 2016
2
Trivial Benefits in Kind - UK Update
For the new tax year 2016-17 HMRC have introduced a new exemption that removes the liability of income tax for certain low valued Benefits in Kind ('Trivial BiKs')
Currently this is subject to Parliamentary approval and will be part of the new legislation Finance Bill 2016. Draft guidance on the new exemption has been published on GOV.UK and will be included in HMRC's Employment Income Manual later in the tax year. Previous treatment of Trivial BiKs was that employers could agree with HMRC that particular BiKs could be treated as trivial and did not need to be returned to HMRC at the end of the tax year and this no longer applies.
General conditions that a 'trivial BiK' must meet in order to qualify are:
• A. the BiK must not be cash or a cash-voucher
• B. the BiK must cost £50 or less
• C. the BiK must not be provided as part of a salary sacrifice or other contractual agreement
• D. the BiK must not be provided in recognition of services performed by the employee as part of their employment, or in anticipation of such services
In a tax year for an employee there is no limit on the amount of BiKs that can be provided where all the conditions are met, unless Condition E applies (see below)
Close Companies
Condition E applies an annual £300 cap where a trivial BiK (that meets conditions A to D) is provided by an employer that is a close company to an employee that is:
• a director or other office-holder in the company member of the family or household of a director or office-holder of the close company
