This is essentially a tax relief for employers who provide their employees with small, non-cash benefits. This means that employers do not need to pay any taxes on the benefit they provide to their employees.
It is available to companies in the UK and can be claimed if the cost of the trivial benefit is less than £50.
What is not included in the Trivial Benefits Tax Relief?
The relief does not apply to any cash payments, or any other type of benefit which includes goods or services that have been provided as part of an employment contract, such as company cars, private medical insurance, shares or pensions.
Are there any other conditions?
The exemption is capped at £300 per year if the employer is a close company and the benefit is provided to a director or their family member.
According to HMRC, a close company is a company:
- which is under the control of:
- five or fewer participators, or
- any number of participators if those participators are directors, or
- more than half the assets of which would be distributed to five or fewer participators, or to participators who are directors, in the event of the winding up of the company
What other non-taxable benefits are available to an employer?
Other main benefits that are not chargeable to tax are:
Free or subsidised meals or light refreshments provided on the employer’s premises, or in a staff canteen provided by the employee’s own employer.
Employer’s contributions to a registered occupational or personal pension scheme in respect of the employee only.
Provision of parking facilities for cars, vans, cycles, and motor cycles at or near the workplace.
The provision of eye tests and/or corrective glasses in connection with an employee’s use of visual display units.
Certain childcare provisions.
Mobile phones.
Employer-provided cycles and cyclist safety equipment, providing they are available to staff generally and used mainly for journeys between home and work and for business journeys.
The benefit of one or more annual staff parties and functions, providing the cost to the employer for each person attending is not more than £150 per year including VAT. For instance, if there were three annual functions at £70 each per employee, the exemption would cover two of them and the employee would be taxed on £70.
The workplace provision of charging facilities for electric or plug-in hybrid cars and vans used by employees.