‘The manner of giving is worth more than the gift’ – an inspiring quote by french tragedian Pierre Corneille, but to have those gifts tax exempt would make proceedings much sweeter for you. Christmas is just around the corner and we are all now either super organized with everything wrapped and ready, or slowly but surely on the inevitable slope to the annual xmas shopping breakdown. But this isnt the only time of year that you may wish to provide your employees with small gifts, a boozy staff function or even treat yourself as a director (because you deserve a treat now and again too!)
Benefits known as ‘Trivial Benefits’ are tax exempt and you will not have to include these within PAYE or on P11D forms wahooo. BUT this doesnt allow you to splash out to extremes, as there are certain conditions that must be met for these benefits to remain tax exempt. So what are the conditions I hear you ask????
The Conditions – The Benefit
- must NOT exceed £50.00 in cash value for each benefit given. Even 1 penny over will mean that the whole benefit will be taxable
- Must NOT be a cash payment – you can however offer gift vouchers if they cannot be exchanged for cash
- Must NOT be part of any contractual obligation
- Must NOT be a reward for their work or performance
Examples of Trivial Benefits could be a birthday meal out, flowers on the birth of a baby or a party for employees.
As I said previously just because you are the director doesnt mean that you don’t deserve that little treat now and again and this even expands to family members. But again be even more careful with this, as a director there is an annual cap of £300.00, so please ensure that you stay within these guidelines to remain tax exempt.
So what are you waiting for ….. its friday… practically the weekend…. get out there and treat yourself (and the team)
Enjoy
Chris Blackwood