Trivial Benefits: A Simple Tax-Free Treat for You or Your Team

Did you know your company can give small gifts to employees, including directors,  without triggering any tax or paperwork?

They’re called “trivial benefits”, and HMRC has a special rule that allows you to give these completely tax-free.

Here’s what you need to know:

What Counts as a Trivial Benefit?

A trivial benefit is a small gift that meets all of the following criteria:

• It costs £50 or less (including VAT)
• It’s a non-cash item (no cash or cash vouchers – but gift cards like Amazon or Tesco are allowed)
• It’s not a reward for work or performance
• It’s not part of an employee’s contract

Special Rule for Company Directors

If you’re a director of a “close company” (most small companies fall into this category), you can receive up to £300 worth of trivial benefits per tax year.

That means up to six £50 gift cards in a year, with no tax or reporting required.

Why This Is Useful

• No income tax or National Insurance for the employee or director
• No employer National Insurance
• No need to report it on a P11D
• The company can deduct the cost from its profits for Corporation Tax purposes

Examples of Trivial Benefits

• A £50 Amazon or supermarket gift card
• A bottle of wine, box of chocolates or bouquet of flowers
• A small thank-you gift for a birthday or special occasion
• A modest team lunch, provided the cost per person is under £50

It’s important that the gift is occasional and not linked to any targets or performance reviews.

What Doesn’t Qualify

• Cash or cash vouchers
• Gifts that cost more than £50 (even if only slightly over)
• Anything given as a reward for work
• Gifts promised in employment contracts

Final Tip

If you’re a sole director of a close company, you can still make use of this allowance. Just make sure you stay within the £300 annual cap and keep a simple record of what was given and when.

Trivial benefits are a great way to show appreciation without creating extra admin or tax costs. Used correctly, they’re a smart and simple perk for directors and employees alike.

If you’d like help applying this in your business, feel free to get in touch. We’re happy to advise.