Trivial benefits are tax-free employee benefits. They are described as ‘trivial’ because they should have little actual value.
According to HMRC, these are the conditions to be satisfied in order to be exempt from tax and NI:
- the cost of providing the benefit cannot exceed £50 per employee (including VAT), or the average cost per employee if provided to a group of employees and it is impracticable to work out the exact cost;
- the benefit is not cash or a cash voucher (but gift cards would qualify as long as they are not exchangeable for cash);
- the employee is not entitled to the benefit as part of any contractual obligation (including under salary sacrifice arrangements);
- the benefit is not provided in recognition of particular services performed (or in anticipation of such services) or as part of their normal employment duties.
If any of these conditions are not satisfied then the benefit is taxed in the normal way – via a P11D, PSA or taxed through the payroll. Also, if the cost of the benefit exceeds £50, the whole amount will be taxable rather than just the excess.
‘Close’ company?
In most instances, an employee can receive multiple trivial benefits throughout the year, as long as each one does not exceed £50. However, where the employer is a ‘close’ company, the exemption is capped at a total cost of £300 in the tax year where the benefit is provided to an individual who is a director or other office holder of the company (or a member of their family or household).
A ‘close’ company is a limited company that’s run by five or fewer shareholders who are all directors.
This £300 yearly limit is separate to the exemption for annual events, such as Christmas parties or summer BBQs. For such events, you may be able to claim up to £150 per employee and is separate to the trivial benefits rules.
Examples of trivial benefits:
Per HMRC’s guidance, some types of examples of trivial benefits are:
- taking a group of employees out for a meal to celebrate a birthday;
- buying each employee a Christmas present or birthday present;
- flowers on the birth of a new baby;
- a summer garden party for employees.
The aforementioned is on the basis that the benefit per employee does not exceed £50.
Here’s an example:
Gifts Paid Through Payroll vs Trivial Benefit Gift Card

More Information:
For more information contact HMRC or your own accountant.