Trivial Benefits: The Tax-Free Way to Thank Your Team

With the year’s end approaching, you might be considering ways to show gratitude to your team for their hard work. What if you could give them something special without adding to your tax burden? That’s where trivial benefits come into play—a smart, tax-efficient way to treat your employees with small perks that won’t cost you or them in tax or National Insurance.

Let’s take a look at how trivial benefits work, and how you can make the most of them.

What Are Trivial Benefits?

Trivial benefits are small, low-value gifts or perks you can offer your staff. HMRC allows businesses to give certain perks worth £50 or less, free from tax or National Insurance—as long as they meet a few simple criteria.

To qualify as a trivial benefit, the perk must be:

• Under £50 in value (including VAT)
• Not cash or a cash voucher (gift vouchers are fine if they can’t be exchanged for cash)
• Not a reward for work (so no bonuses disguised as gifts!)
• Not part of their contract or a regular benefit

So, if you’d like to give your team a box of chocolates, a gift card for their favourite coffee shop, or a bouquet and it ticks the above boxes, it’s a win-win!

Ideas for Trivial Benefits

Wondering what to give? Here are some tax-free, under-£50 ideas to get you started:

• A box of festive treats or a bottle of wine
• A gift voucher
• A bouquet of flowers to brighten their day
• Tickets to a local event

These little gestures go a long way in showing appreciation without adding to your tax load. Just keep in mind that the gift shouldn’t be part of their employment agreement or given for performance.

Stay Within the £50 Limit

One important point to remember: the £50 limit applies to each individual benefit, not annually. This means you can offer multiple trivial benefits throughout the year—just ensure each one remains under £50.

For example, you might want to treat a team member on their birthday and then give another small gift for Christmas. As long as each gift is £50 or less, there’s no tax to worry about. However, if you go over the £50 mark—even by a pound—the entire amount becomes taxable, not just the excess.

Trivial Benefits for Directors: Know the £300 Annual Cap

If you’re a director of a limited company with fewer than five shareholders, you’re eligible for trivial benefits, but there’s an annual cap of £300 for gifts to directors or their families. This cap allows directors to enjoy up to six £50 perks over the year, completely tax-free, as long as they’re in line with HMRC’s rules.

Why Trivial Benefits Are a Great Move for Your Business

Incorporating trivial benefits into your workplace shows your team that you appreciate them without the financial fuss. Small perks like these help to build a positive culture, improve morale, and even contribute to job satisfaction and retention. From a business perspective, they’re a cost-effective way to reward employees without extra tax or National Insurance.

Additionally, as long as you track these benefits, they don’t add complexity to your bookkeeping, making them a simple way to add value to your team.

How to Keep Trivial Benefits On Track

Here are some bookkeeping basics to help you stay compliant with HMRC’s trivial benefit rules:

1. Save receipts for each benefit, and double-check they’re all under £50.
2. Record key details—the date, the gift, and who received it.
3. Ensure each benefit meets HMRC’s criteria—no cash and not linked to performance.

Keeping organised records will make compliance easier should HMRC ever take a closer look.

Final Thoughts

Trivial benefits may be small, but they can make a big impact on your team’s morale—and on your business’s tax efficiency! Thoughtful, low-cost perks can show your appreciation, reduce your tax bill, and keep your finances in good order.

Want help with managing your business perks and other expenses? Let’s chat about how I can help keep your finances compliant and efficient year-round. Drop me a message to learn more!