Nov 2017
9
Trivial Benefits in Kind
Instead of a taxable cash Christmas bonus, why not give your employees a seasonal gift – a turkey or a nice bottle of wine?
In order to provide these gifts – it must be ensured that the gift falls under trivial benefits in kind.
Trivial benefits apply where the benefit:
- Is not cash or a cash voucher
- Costs £50 or less
- Is not provided as part of a salary sacrifice or other contractual arrangement
- Is not provided in recognition of services performed by the employee as part of the employment, or in anticipation of such services
Accordingly, gifts that cost under the £50 limit would qualify. It is also possible to provide employees with a gift voucher (not a cash voucher) where the limit is £50 or less. They can only be provided as a gesture of goodwill be it at Christmas or other such seasonal occasions.
Employers no longer need to report such trivial benefits on P11ds or PAYE Settlement Agreements (PSA). However, if the gifts have a value in excess of £50 or cannot be counted as trivial benefit, then the gift must be reported on the form P11d and Class 1A NICS may be payable on the value of the gift.
£300 Annual Cap
There is an annual trivial benefits cap of £300 that is applied to directors or other office-holders of “close companies” (close company is a limited company that’s run by 5 or fewer shareholders) and to members of their families or households. The £300 annual cap does not apply to other employees.
