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Tax tip - trivial benefits

Here is a great tax tip for small limited companies.

You can provide your staff with small benefits (such as chocolates, bottle of wine, a meal out) and have this allowable against your corporation tax and not pay employment related taxes on the benefits (or inform HMRC).

These are known as trivial benefits. There are four hurdles you must get over to allow a trivial benefit;

  1. The benefit isn’t in the terms of an employees contract

  2. The benefit isn’t cash or a cash voucher

  3. It cost you less than £50 to provide at a time

  4. It isn’t a reward for work performance

So if you and three staff members go out for a meal because it is Janice’s birthday, the company can pick up the £180 bill without losing out on tax (£45 per head).

But, if you were going out to celebrate hitting your sales targets, then that cannot be counted as a trivial benefit, as that is linked to performance.

There is no limit on how many times one of your staff can be provided with a trivial benefit as long as it hits the above criteria.

And great news for directors of small businesses - you can get trivial benefits too! But for most small business directors this is limited to £300 per year.


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