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 to 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 National Insurance contributions (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
- no tax or NICs to pay
Technical guidance
EIM21861: benefits that are
trivial in amount
EIM21863: Examples of trivial
benefits
