Tax-Free trivial benefits during one fiscal year

The HMRC trivial benefits rules let you give small, non-cash perks without tax, National Insurance or reporting — if all conditions are met.

You don’t pay tax if ALL of these apply

  • It costs £50 or less to provide (VAT & delivery included). If it’s over £50, the whole amount is taxable.
  • It is not cash and not a cash-redeemable voucher. (Store gift cards are fine if not exchangeable for cash.)
  • It’s not a reward for work or performance and not contractual (including salary sacrifice).

If any condition fails, treat it as a normal benefit (taxable, usually Class 1A NIC, and reportable).

Directors of ‘close’ companies

A director (or office holder) of a close company has a £300 annual cap on trivial benefits. This cap also looks at trivial benefits given to members of their family/household (unless those individuals are employees taxed in their own right).

  • It’s per tax year (6 April–5 April), separate from the £50-per-benefit condition.
  • If any single benefit exceeds £50, it’s not trivial at all.

Common pitfalls

  • Counting only item price — you must include VAT and delivery.
  • Using salary sacrifice or putting it in contracts — that cancels the exemption.
  • Reimbursing an employee for something they bought — reimbursement can’t be a trivial benefit. Provide it directly.

Good practice

  • Keep a simple log (date, recipient, description, cost).
  • Spread benefits across the year; avoid anything linked to performance/targets.
Timing: treat the benefit at the time it’s provided (e.g., when a gift card is given). HMRC’s rules focus on cost and conditions at provision, not when a voucher is redeemed. Keep evidence of the date and cost.

Examples

Qualifies as trivial

  • Birthday flowers costing £45 including delivery.
  • £40 store gift card (not cash-redeemable), not linked to performance.
  • Director of a close company receiving six separate £50 non-cash perks across the tax year (staying within the £300 annual cap).

Does NOT qualify

  • £52 hamper (VAT included) — the whole amount becomes taxable.
  • Cash or cash-redeemable vouchers.
  • Reward for meeting a sales target (performance-linked).
  • Reimbursing an employee for a gift they bought themselves.

Note: Staff parties are covered by a different “annual function” rule (£150 per head, conditions apply). That’s separate from trivial benefits.