NOT-SO-TRIVIAL BENEFITS

 

If you’re a company owner/director, it’s worth knowing that HMRC allows ‘trivial’ benefits to be paid to staff without any extra tax legwork.  

What’s a trivial benefit? Essentially, anything purchased for staff that costs less than £50, is not cash (or convertible to cash) and – importantly – is not given contractually or as a reward.  

So if your company buys you, Mr Director, a nice non-working lunch out at Monty’s Deli? Trivial benefit. 

Flowers for Mother (for under 50 quid – ahem)? Trivial benefit (family members are included).

Mr and Mrs Director’s dinner at the George & Dragon for £100? Trivial benefit (averaging is allowed on a joint bill).  

Unsurprisingly, there is an annual limit of £300 per person if the company is a close company (https://lnkd.in/em_PYXr) to stop the obvious opportunity for abuse. So how should you benefit from this largesse?

Firstly, if your expense is a genuine business expense, claim it as such. But if not, set up a ‘Trivial Benefit’ cost code in your accounting system to track your spend, and ensure your accountant checks & claims accordingly at year end. 

Meanwhile… champagne, anyone?

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