Trivial benefits

gifts to employees up to £50 per gift is tax-free (this includes a meal out). There is no limit on the total amount that can be spent on employees, but for close company directors & their family working in the business, the amount is limited to £300 per year. The 3 key conditions are:

  • The gift must cost no more than £50;
  • The gift must not be a reward for services or in any way contractual;
  • The gift must not be cash or a cash voucher.

The exemption for directors is limited to £300 per year, and for employees and directors to the value of £50 per perk. This means a director could take up to six tax and NI-free perks worth £50 or less. The rules don’t prevent the exemption from being used multiple times in a short space of time. This means that even though there’s only a few weeks left in the tax year, there’s still time for you to make use of the full £300.

If you can’t find anything suitable to spend your company’s money on by the end of the tax year, it could instead buy you retail vouchers of £50 each to take maximum advantage of the exemption. The benefit is treated as arising at the time your company purchases the vouchers, not when you redeem them. Don’t buy six vouchers from the same place at the same time, HMRC might argue that this is a single benefit. Buy them at separate times and choose  online retailers which offer a wide range of goods to buy.