Business Money HMRC

Trivial Director & Staff Benefits

#DidYouKnow you can buy small treats and gifts for yourself as a director and for your employees as a tax deductible expense AND not have to claim them on your P11D form as a benefit in kind?

Of course, we are talking about HMRC here, so there are some conditions:

Up to £50 per benefit

You can spend up to £50 each time you provide a benefit to yourself as a director or one of your employees. Make sure it doesn’t go even a penny over though, as the full amount will then become taxable for the employee/director as it will be deemed a normal benefit which would then have PAYE and NIC applied to it.

You also need to ensure it is an actual expense – there must be a receipt for the transaction – it isn’t a notional amount that you can claim when you feel like it.

Up to £300 per tax year for ‘close’ company directors

You can only claim up to £300 of trivial benefits (obviously in up to £50 chunks) per tax year as a director of a ‘close’ company. A ‘close’ company is any company run by up to 5 shareholders. Make sure you keep a record of the total – it would make sense to keep this with your payroll records as it does follow the tax year rather than the financial year of your business.

No cash or cash voucher

You can buy anything from a store-card voucher to a box of chocolate or a turkey for Christmas dinner to a bunch of flowers. But you can’t claim the cash or anything that can be exchanged for cash. As I mentioned above, you must keep the receipt for the transaction (as you would with any other transaction for your business!)

Not a reward for performance

It’s important to note that this gift/treat is exactly that, and it’s not a reward for performance.

Not in employment terms

You should ensure that the benefit you are giving is not in the employment terms anywhere, this benefit should not be contracted.

More Information

Here’s the HMRC link for the official guidance => HMRC Tax on Trivial Benefits

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