Glossary · UK
What is Trivial Benefits Exemption?
A rule that lets employers give small perks costing 50 pounds or less, free of tax and National Insurance, provided strict conditions are met.
Full Definition
The trivial benefits exemption lets employers provide low-value perks to employees without any income tax or National Insurance charge, and without reporting them to HMRC. To qualify, a benefit must meet all of the conditions: it must cost 50 or less to provide, it must not be cash or a cash voucher, it must not be a reward for work or performance, and it must not be provided under a contractual obligation or salary sacrifice arrangement. Typical examples are a bottle of wine, flowers, a birthday gift, or a meal to celebrate an occasion. Where the cost cannot be worked out per person, such as a shared gift, you take the average cost per employee. There is no overall annual limit for most staff, so multiple qualifying benefits can be given across the year. However, for directors and other office-holders of close companies, and their families, an annual cap of 300 applies. If a benefit exceeds the 50 limit, the whole amount, not just the excess, becomes taxable as a benefit in kind. The exemption is a useful way to reward staff in a tax-efficient manner, but the conditions are policed strictly by HMRC.