Use Your Company for Perks and Cut Corporation Tax
Trivial Benefits The Secret to Tax-Free Perks
As the year winds down, it's the perfect time to reflect and show a little appreciation to the people who have helped keep your business running smoothly. Whether it’s a small thank-you to your team or a thoughtful seasonal gift, you might be pleasantly surprised to know you can offer certain perks without triggering a tax bill. This is where trivial benefits come in, and honestly, they’re one of those helpful little allowances not enough people take advantage of.
So, What Are Trivial Benefits?
Put simply, trivial benefits are small, low-cost gifts or gestures, each worth £50 or less, that you can give to employees or even to yourself if you're a director, without paying tax or National Insurance.
There are a few rules they need to meet:
Each benefit must be £50 or less, including VAT
It can’t be cash or something that can be exchanged for cash
It must not be a reward for work or performance
It shouldn’t be something expected or included in their contract
So, if you decide to pick up a box of chocolates or grab a coffee shop gift card to say thanks, as long as it fits within these criteria, it could count as a tax-free perk. Simple and effective.
Easy Ideas for Trivial Benefits
Here are a few examples of thoughtful gifts you can give, all under the £50 threshold:
A bottle of wine or some festive nibbles
A gift voucher for a favourite local shop or café
A bunch of flowers to brighten someone’s day
Tickets to the cinema or a local event
These kinds of gestures go a long way in making someone feel appreciated, and the beauty of it is that they don’t come with any tax complications, as long as you follow the rules.
A Quick Heads-Up on Limits
This one’s important. The £50 limit is per gift, not per year. That means you can give multiple trivial benefits throughout the year, such as a birthday gift in the spring, a small summer treat, and something festive in December. As long as each one is £50 or under, you're within the rules.
If even one gift goes over £50, the full amount becomes taxable. So it's worth keeping an eye on the total when you're planning what to give.
What If You're a Director?
If you’re a director of a limited company with fewer than five shareholders, the same rules apply, with one extra condition. There’s a total annual cap of £300 for trivial benefits given to directors or their family members.
So, for example, you could give yourself or your spouse six small gifts of £50 each across the year. As long as you don’t go over the £300 total, you won’t owe any tax. It’s a great way to enjoy a few small treats through the business without any added cost.
Why Trivial Benefits Are Worth It
These small tokens might seem insignificant, but they can really boost morale. An unexpected treat or a simple thank-you gift can make a big difference to someone’s day. And from a financial perspective, they’re a clever way to reward people without the extra burden of tax or National Insurance.
It’s a win-win. You show appreciation, and your accounts stay tidy.
Keeping Things Organised
To keep everything straightforward and compliant, make sure you:
Keep receipts for every benefit
Record the date and the recipient
Double-check that each gift meets the criteria
A simple spreadsheet or note in your bookkeeping system is often all you need. That way, if HMRC ever wants to take a look, you’ve got everything in order.
Wrapping It All Up
Trivial benefits are one of those helpful business tips that often get overlooked. They’re simple, thoughtful, and completely legitimate when used correctly. Whether it’s a token of appreciation for your team or a well-deserved treat for yourself, they’re a smart way to give back without adding stress to your finances.
If you're not sure where to start or want help making sure you're doing things by the book, I'm always here to help. Let's make the most of the perks available to you and keep your business running smoothly.
Feel free to get in touch if you’d like to chat about how to make this work for you. The kettle is always on.