Free? Well, it’s free in the same way that cash is free from the “free” cash machine. “Trivial” benefits paid to employees do not cost anything (in tax and national insurance) in the same way that the cash machine won’t charge you for using it. Trivial benefits also do not need to be declared on a P11D.
What is a trivial benefit?
There are three conditions:
- the cost of the benefit to the employer must be £50 or less;
- the benefit must not be cash or a voucher;
- the benefit must not be contractual. It should just be a gift to the employee.
Directors can also enjoy trivial benefits. However, whereas trivial benefits for other employees appear to be unlimited, directors can only receive £300 worth of trivial benefits in a tax year.