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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