The Power of Small Perks: Trivial Benefits Explained
As we head towards the end of the year, you’re probably thinking about ways to show your team some appreciation. A little thank-you gesture here, a festive treat there—it all adds up. But what if I told you that you can give your employees small perks without worrying about the taxman knocking on your door? Enter: Trivial Benefits.
Yes, these tiny little perks are a tax-free way to boost morale and make your staff feel appreciated—without either of you having to pay tax or National Insurance. But, like anything good, there are a few rules you need to follow.
What are Trivial Benefits?
Trivial benefits are exactly what they sound like—small gifts or perks, £50 or less. HMRC gives businesses the go-ahead to hand these out if they tick the right boxes. The best part? Neither you nor your employees must pay tax or National Insurance on them.
Here’s what you need to know:
Under £50 in value (including VAT)
No cash or cash vouchers (but gift cards are fair game)
Not a reward for work (so no, you can’t hand these out for smashing targets)
Not part of their contract (it’s got to feel like a surprise, not a bonus)
So, that box of chocolates, a coffee shop gift card, or tickets to a local event? All good! Just don’t start handing out cash—it kills the tax-free vibe.
Examples of Trivial Benefits
Need some ideas to keep things under £50? Here’s a few:
A bottle of wine or festive treats to say “Thanks”
A gift voucher for their favourite shop
A nice bouquet to brighten up their day
A little treat like movie tickets for a fun night out
These are the small, thoughtful perks that go a long way in showing appreciation, without causing any tax headaches.
Watch the £50 Limit!
One important thing to keep in mind—£50 is per benefit, not per year. So, you can hand out multiple perks throughout the year as long as each stay under that magic number. Birthday treat? Christmas gift? Go for it.
But if the gift creeps over £50, it’s no longer classed as “trivial,” and you’ll have to pay tax and National Insurance on the whole amount, not just the bit over £50. Nobody wants that.
Directors, Listen Up
If you’re a director of a limited company with fewer than five shareholders, you can still enjoy trivial benefits, but there’s a cap of £300 a year for you and your family. So, you could treat yourself and your spouse to up to four £50 gifts a year without triggering a tax bill. Perks of the job, right?
Why Should You Care?
Trivial benefits might seem, well, trivial—but they’re a great way to build a positive workplace culture. These small gestures show your team you appreciate them, and that can do wonders for morale, job satisfaction, and staff retention. Plus, no extra tax or National Insurance to worry about? Win-win.
From a business perspective, they’re a smart way to reward your team without complicating your accounts. If you document everything properly, there’s no hassle.
Keeping It Straight in Your Accounts
It’s important to track these benefits properly, even if they’re small. Here’s a quick checklist to keep you on track:
Keep receipts for each gift or perk.
Record the details—date, amount, and who it was for.
Make sure it meets all the criteria: under £50, no cash, and not tied to performance.
These little perks might be small, but they can make a big difference to your team’s happiness—and to your tax bill. By keeping things thoughtful yet low-cost, you’re not only boosting morale but also keeping your finances in check.
Need help keeping track of all these little perks and making sure your accounts stay squeaky clean? Get in touch, and let’s chat about how I can help keep your business running smoothly all year round.
E-mail us now on karen@pinklilyaccounting.co.uk to see how you can work with us.
Building a successful future, together.