Check If Your Benefit Qualifies

Enter the details of the benefit you want to provide to check if it qualifies for the trivial benefits exemption and calculate potential tax savings.

Maximum £50 per benefit
For directors only - £300 annual cap

Status

-

Income Tax Saved

£0

Employer NI Saved

£0

Employee NI Saved

£0

Total Combined Savings

£0.00
What is a Trivial Benefit? A trivial benefit is a small gift or perk costing £50 or less that is completely exempt from income tax, National Insurance, and P11D reporting. Employers can use this exemption to reward employees tax-efficiently throughout the year.

Understanding UK Trivial Benefits Exemption

The trivial benefits exemption was introduced in April 2016 to allow employers to provide small gifts and perks to employees without creating a tax burden. This replaced the previous informal £50 threshold that HMRC had applied.

The Five Key Rules

For a benefit to qualify as trivial, it must meet ALL of these conditions:

  1. Cost £50 or less per benefit - This is the cost to provide the benefit, including VAT. If a benefit costs £50.01, the entire amount is taxable.
  2. Not be cash or a cash voucher - Cash gifts never qualify. Cash vouchers that can be exchanged for cash also don't qualify. Non-cash vouchers (like Amazon gift cards) are acceptable.
  3. Not be a reward for work or performance - The benefit cannot be linked to hitting targets, completing projects, or rewarding good performance. Birthday gifts are fine; performance bonuses are not.
  4. Not be a contractual entitlement - The benefit cannot be written into the employment contract or be an expected regular payment.
  5. Not be provided via salary sacrifice - The employee cannot give up salary in exchange for the trivial benefit.
Important: If a benefit exceeds £50, the ENTIRE amount becomes taxable - not just the excess over £50. For example, a £51 gift creates a £51 taxable benefit, not a £1 taxable benefit.

What Qualifies vs What Doesn't

Qualifying Benefits

  • Birthday gifts under £50
  • Christmas hampers
  • Flowers or chocolates
  • Non-cash gift cards
  • Team lunch (if under £50 each)
  • Cinema or theatre tickets
  • Small thank you gifts
  • Easter eggs
  • Welcome gifts for new starters

Non-Qualifying Benefits

  • Cash gifts of any amount
  • Cash vouchers
  • Performance bonuses
  • Gift over £50
  • Contractual benefits
  • Sales incentives
  • Salary sacrifice items
  • Season tickets
  • Regular expected payments

Common Trivial Benefit Examples

Benefit Typical Cost Qualifies? Notes
Birthday gift card £50 Yes Must be non-cash voucher
Christmas hamper £45 Yes Popular choice for annual gift
Team pizza lunch £15/person Yes Per-head cost under £50
Flowers for new baby £35 Yes Genuine personal gift
Sales target bonus £50 No Reward for performance
Cash birthday bonus £50 No Cash never qualifies
Luxury hamper £75 No Exceeds £50 limit

Director £300 Annual Cap

Directors of close companies (typically family-owned businesses with 5 or fewer participators) have an additional restriction:

Directors of Close Companies

  • Maximum £300 per tax year
  • Can receive up to 6 x £50 benefits
  • Includes family member benefits
  • Tracked per individual director

Non-Director Employees

  • No annual cap on total value
  • Unlimited £50 benefits allowed
  • Each benefit must be under £50
  • Same 5 qualifying rules apply

What is a Close Company?

A close company is controlled by 5 or fewer "participators" (shareholders who have rights to the company's income or assets), or any number of participators who are directors. Most small and medium family-run limited companies are close companies.

Director Family Members: Benefits given to a director's family members (spouse, children, etc.) count toward the director's £300 annual cap. This prevents circumventing the limit through family gifts.

Tax Savings Breakdown

When a benefit qualifies as trivial, both the employer and employee save money:

Component Non-Trivial (Taxable) Trivial Benefit Savings on £50
Employee Income Tax (40%) £20.00 £0 £20.00
Employee NI (8%) £4.00 £0 £4.00
Employer NI (15%) £6.90 £0 £6.90
Total Savings £30.90 tax £0 tax £30.90

For a higher-rate taxpayer receiving a £50 trivial benefit, the combined tax saving is over 60% of the benefit value. This makes trivial benefits an extremely tax-efficient way to reward employees.

Best Practices for Employers

1. Keep Records

Document the cost, date, and reason for each trivial benefit. Track director benefits carefully to stay within £300 cap.

2. Stay Under £50

If a benefit costs £50.01, split it into two occasions or choose a cheaper alternative. The cliff-edge rule is strict.

3. Avoid Performance Links

Never describe trivial benefits as rewards for work. Use occasions like birthdays, Christmas, or personal milestones.

4. Use Non-Cash Vouchers

Gift cards from specific retailers (Amazon, M&S, etc.) qualify, but Love2Shop-style cash-equivalent vouchers may not.

UC

Reviewed by: UK Calculator, Founder & Developer

Founder & Developer - UKCalculator.com

The UK Calculator team is the founder and developer of UKCalculator.com, providing free, accurate calculators for UK residents.

Frequently Asked Questions

A trivial benefit is a small gift or perk costing £50 or less that employers can give to employees completely tax-free. Unlike regular benefits in kind, trivial benefits don't need to be reported on P11D forms, and neither the employer nor employee pays any tax or National Insurance on them. The benefit must not be cash, not be a reward for work, not be in the employment contract, and not be provided through salary sacrifice. Common examples include birthday gifts, Christmas hampers, flowers, and non-cash gift cards.

Directors of close companies (typically small family-run businesses) have an annual limit of £300 for trivial benefits in each tax year. This means directors can receive a maximum of 6 benefits at £50 each. The cap applies to each director individually and includes benefits given to their family members. Non-director employees have no annual cap - they can receive unlimited trivial benefits throughout the year as long as each individual benefit costs £50 or less and meets all other criteria.

Yes, Amazon gift cards can qualify as trivial benefits because they are non-cash vouchers that can only be spent at a specific retailer. The key distinction is between non-cash vouchers (which qualify) and cash vouchers (which don't). A cash voucher is one that can be exchanged for cash or is equivalent to cash. Retailer-specific gift cards like Amazon, M&S, John Lewis, or supermarket vouchers typically qualify. However, vouchers like Love2Shop or similar that can be used at multiple retailers and might be exchangeable for cash may not qualify - check the specific terms carefully.

If a benefit costs even one penny over £50, the ENTIRE amount becomes a taxable benefit in kind - not just the excess. For example, a gift costing £51 creates a £51 taxable benefit, meaning the employee would owe tax on £51 and the employer would owe Class 1A NI on £51. The benefit would also need to be reported on P11D. This cliff-edge rule means it's crucial to check costs carefully. If you're close to £50, consider splitting the benefit across two occasions or finding a slightly cheaper alternative.

It depends on how it's structured. A cash Christmas bonus never qualifies as a trivial benefit - cash is always taxable. A £50 or less non-cash Christmas gift (like a hamper, gift card, or present) can qualify if it's not linked to work performance and isn't contractual. However, if employees expect the bonus every year or it's mentioned in their contract, it may not qualify. The safest approach is to give genuine gifts (hampers, gift cards) that aren't positioned as bonuses or rewards for work done during the year.

No, qualifying trivial benefits are completely exempt from P11D reporting. You don't need to include them on the employee's P11D form, you don't need to pay Class 1A National Insurance on them, and the employee doesn't pay income tax. However, you should keep records of trivial benefits provided (date, cost, recipient, reason) in case HMRC ever queries them. For directors, you'll need to track cumulative benefits to ensure you stay within the £300 annual cap.

The trivial benefits exemption only applies to employees and office-holders (including directors). Self-employed contractors, freelancers, and other non-employees are not covered by this exemption. If you give gifts to contractors, they would typically be treated as business expenses and may be taxable for the recipient. However, if a contractor is genuinely employed (even if incorrectly labelled as self-employed), they may be entitled to trivial benefits - but this would also have wider IR35 implications that should be addressed.

For shared benefits like team meals or events, you need to calculate the per-head cost. Divide the total cost by the number of attendees to get the individual benefit value. For example, a £400 team lunch for 10 people would be £40 per person - which qualifies. A £600 lunch for 10 people would be £60 per person - which doesn't qualify. If exact costs are difficult to determine (like at a shared event), HMRC may accept a reasonable estimate, but you should document your calculation method. The key is that each individual's benefit must be £50 or less.