In this section:
- Providing employee expenses and benefits: an overview
- Schemes that reduce expenses and benefits paperwork
- Expenses and benefits A to Z
Trivial benefits
Definitions or restrictions
There is no lower limit beneath which benefits are not taxed. However, you can apply to HM Revenue & Customs (HMRC) for agreement to allow you exclude certain benefits from your reporting on the grounds that they’re trivial.
There is no strict definition of what counts as a trivial benefit, but in deciding on each case HMRC takes the following factors into consideration:
- the cost to you of providing the benefit to each employee
- your reasons for providing the benefit – in particular, whether it is provided as a reward for the employee’s services, or in connection with their general welfare
- the resource cost (both yours and HMRC’s) of dealing with the admin for the benefit, relative to the amounts of tax and NICs at stake
An example of a trivial benefit is a small gift (such as a bunch of flowers) given to an employee to celebrate a personal event, such as the birth of a child.
What to report, what to pay
If you obtain agreement from HMRC, then you have:
- no reporting requirements
- tax or NICs to pay
