mpanies employing staff may find trivial benefits for employees a useful way of giving them a gift but without worrying about it affecting their tax while remaining allowable for tax by the employer.
The rules allow payments of upto £50 to an employee as long as it is not cash or a cash voucher. It must be a gift and not contractual or in recognition of any particular service, so what are the best ways to use this? Some of the occasions or reasons being used are:
- Christmas or other faith anniversaries such as Diwali or Ramadan
- New year, not forgetting Chinese new year which is different
- Special personal events such as marriage, parenthood
- in fact almost any plausible reason you can think of!
These gifts can include:
- Theatre or concert tickets
- Expensive ties
- Store vouchers
- Sports lesson
- Wedding anniversary champagne
As they are supposed to be ad hoc gifts you would not expect to give them every month but many companies are doing so 10 months out of 12, so potentially you can gift without tax upto £500pa. There is of course a catch all for directors where the maximum is restricted to £300pa. Full details can be found at HMRC Trivial benefit guidance.
This is a brief explanation of the Trivial benefit for employees rules and may not apply to specific situations. Every business is different so you should therefore seek professional advice before taking any steps based on the contents. If you would like advice in this or other areas feel free to call. Alastair Wood, AW Accounting, Gravesend, Kent – Accountants who “speak your language”