Accounting, Benefits

Trivial Benefits – A Revisit

Trivial benefits are some of the best perks of any business for both employers and employees, but note the condition below.

Conditions:

  1. Cost must not exceed £50 including VAT.
  2. Must not be cash or cash vouchers.
  3. Employee must not be entitled to the benefit.
  4. Must not be given as a reward for work or performance eg long service awards or thank-you gift for performance.

Important Consideration:

No annual limit for employees but there is an annual cap for directors.

Examples:

  • Meal provided to 5 employees to lift morale – total bill £240. As per employee cost is less than £50, it qualifies as a trivial benefit.
  • Turkeys bought for employees at Xmas. Total cost £450 between 10 employees. This is covered as all conditions are met.
  • Flowers for birthdays may be treated as trivial benefits if under £50.
  • Hampers may be treated as trivial benefits.

Note:

  • Gift vouchers for performance or for hitting targets are NOT trivial benefits. Rewards for performance are calculated as part of normal pay and will be dealt with through payroll.
  • A working lunch, buffet lunch at a monthly meeting, lunch provided at a seminar, end of month drinks, subsidised meals to employees, etc are NOT trivial benefits.
  • If an employee works through lunch, and she is consequently provided with lunch, this does NOT qualify as a trivial benefit.
  • There must be strict record keeping showing all the year’s trivial benefits.
  • Trivial benefits do not need to be given to all employees.
  • The cost of a social function for staff does NOT qualify as a trivial benefit.

About Phoenix

Accountant | Tax Specialist | Mother | Entrepreneur | Blogger

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Phoenix Debola is licensed and regulated by the Institute of Financial Accountants (UK), the Institute of Public Accountants (Australia) and FA and the Association of Accounting Technicians (AAT) to provide Accountancy, Tax and related services. IFA/IPA and AAT are recognised by HM Treasury to supervise compliance with the Money Laundering Regulations and Phoenix Debola Accountancy Practice is supervised by the AAT in this respect.

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