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P11D tips – Skip the trivial stuff?

28 May 2019

Published by: Stuart Daltrey, Director – Employment Tax

The statutory exemption from tax and NIC for trivial benefits costing £50 or less introduced on 6 April 2016 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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