Trivial Benefits – A New Exemption

04 May 2015
Previously, there was no minimum cost threshold below which benefits were disregarded for tax purposes. This changed on 6 April 2015. From this date ‘trivial’ benefits are disregarded and no longer have to be reported on the dreaded PIID (Return of expenses payments and benefits).

So what is a trivial benefit?

The conditions for the benefit to be regarded as trivial, and therefore exempt, are:

  • The benefit must not be cash or a voucher exchangeable for cash.
  • It can’t be used in conjunction with relevant salary sacrifice arrangements or any other contractual arrangement.
  • It must not be provided in recognition of particular services performed or anticipated in the course of the employment.

The cost of the trivial benefit must not exceed £50.

A trivial benefit qualifies for exemption if it is made in recognition of a life event such as an employee’s birthday, wedding or new baby. This means that an Employer could give employees high street retail vouchers of up to £50 as a birthday or Christmas present and qualify for the exemption under the new rules.

For further information contact Green & Co.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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