P11D tips – Skip the trivial stuff?

22 February 2021

Published by: Michael Hepburn, Senior Manager – Employment Tax

The statutory exemption from tax and NIC for trivial benefits costing £50 or less means there is no need to report qualifying ‘trivial’ benefits on forms P11D but only where all four of the following conditions are met:

  • The benefit is not cash or a cash voucher
  • The cost of providing the benefit, or in some circumstances the average cost per person of providing the benefit, does not exceed £50
  • The benefit is not provided through a salary sacrifice arrangement or any other contractual obligation, and
  • The benefit is not provided in recognition of particular services performed by the employee in the course of the employment or in anticipation of such services.

The exemption applies equally to benefits provided to the employee or to the employee’s family or household.

Where the employer is a close company and the benefit is provided to an individual who is a director or other office holder of the company (or to a member of their family or household) the exemption is capped at a total cost of £300 per tax year. If any of these conditions is not met, the benefit is taxed in the normal way, subject to any other exemptions or allowable deductions and it must be reported on a P11D as appropriate.

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If you found this article helpful, read more P11D tips on: Calculating taxable benefits of kind under OpRA.