18-10-2019

Are your Trivial Benefits being recorded correctly so that you and your employees will benefit?

Did you know that the rules on the exemption from tax and NICs for Trivial Benefits apply to the provision for employees of ‘a benefit’?

Benefits can take on many forms whether they be a single item/event, or multiples of a series of items/ events that actually collectively constitute a single benefit.

For example, in the Employment Income Manual at EIM21865: Employer D gives an employee a gift card which costs the employer £10 to provide. The employer tops up the gift card on 7 further occasions, at a cost of £10 on each occasion. Although the benefit is topped up on separate occasions, there is a single benefit of the provision of the gift card. The total cost to the employer of providing the benefit over the period of employment is £80. Therefore, the benefit is not exempt as a trivial benefit.

How many times have we heard that different departments are awarding their staff with gift cards/vouchers that the managements have topped up on a Company/Personal Credit card for a job well done?

So, what might appear to be several individual benefits can be a single benefit provided over the tax year. No longer classed as Trivial and falls into reportable for Tax and NI purposes

Season tickets – (example taken from EIM21865)

A season ticket for a football club (Ticket averages out at £40 a match).

If you give your employee access to the ticket once during a tax year, then that benefit is trivial and is not taxable under the rules.

However, if the same employee has access to the season ticket twice or more during a year, the benefit of the access to the ticket is a single benefit and is not trivial.

How many companies have these staff perks and they go un-reported? another area that we need to consider for Tax and NI purposes but are often overlooked or not even reported to payroll.

Please note that it is the provision of that access that:

• Makes it a benefit

• Once the cost of provision exceeds £50 it takes it out of the trivial benefits exemption.


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