What counts as a trivial benefit under HMRC rules in the UK?

Full answer

HMRC's trivial benefits exemption allows employers to give small perks to employees without the employee paying tax or the employer reporting the benefit on a P11D or through payroll. The four conditions that must ALL be met: 1. The cost to the employer is £50 or less (including VAT). If it costs more than £50, the full amount is taxable -- not just the excess over £50. 2. It is not cash or a cash voucher. Gift cards that can be exchanged for cash are also excluded. Non-cash retail vouchers (e.g., a high street gift card) may qualify if the other conditions are met. 3. It is not a reward for performance, or in recognition of services. This distinguishes trivial benefits from salary extras or bonuses. 4. There is no contractual entitlement to receive it. Ad hoc and genuinely discretionary gifts qualify; regular scheduled payments to all staff may be challenged. Examples that typically qualify: - A box of chocolates, flowers, or a bottle of wine for a birthday or at Christmas. - A meal out not connected to performance (e.g., team lunch as a morale boost). - A hamper at Christmas worth under £50. Examples that do NOT qualify: - Cash or a payment by BACS. - A voucher that can be exchanged for cash. - A bonus presented as a gift. Directors of close companies: - There is no limit on the number of trivial benefits employees can receive in a year. - However, directors (or their family members) in close companies can receive no more than £300 worth of trivial benefits per tax year in total. Administration: - No P11D entry is required. No payrolling of benefits required. Keep records as evidence that the conditions were met.

Related guides

• Uk Benefit In Kind P11d Complete Guide 2026

More answers

• What is the benefit-in-kind (BIK) rate for electric company cars in the UK for 2026/27?
• What counts as a trivial benefit under HMRC rules in the UK?