Trivial Benefits

Employers are normally required to report all so-called ‘Benefits in kind’ and relevant expenses provided to employees on forms P11D or form P9D depending on the level of their earnings. This means there could be tax consequences for the employee and National Insurance to pay for the employer- not to mention the potential reporting requirements for both parties. 

However, in Budget 2014 the Chancellor announced a statutory exemption for certain “trivial” benefits. In order to qualify for the exemption, the benefit must meet 4 main conditions:

1. the benefit is not cash or a cash voucher
2. the cost or the average cost per person of providing the benefit, does not exceed £50
3. the benefit is not provided pursuant to relevant salary sacrifice arrangements or any other contractual obligation
4. the benefit is not provided in recognition of particular services performed by the employee in the course of the employment or in anticipation of such services

The change removes the reporting requirements and the tax and National Insurance obligations.

Benefits in Kind and expenses can be a complicated area. If you would like to discuss your circumstances in more detail, we can put you in touch with your local TaxAssist Accountant.

Date published 2 Mar 2015

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.