Blog:

P11D tips – Skip the trivial stuff?

07 February 2022

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. During COVID, many employers have given small items to staff (for example, at Christmas instead of a staff event) so it is important to make sure that the exemption applies. 

There are four qualifying conditions that must all be 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.

P11D software

P11D software from BDO has an outstanding reputation for flexibility and ease of use - read more on our P11D software.

If you found this article helpful, read more P11d tips: COVID-19 and benefits in kind.

BDO'S P11D
SOFTWARE

Meeting all your expenses and benefits in kind reporting needs

FIND OUT MORE

 

P11D is just one of the reporting deadlines that employers need to be aware of for 2022. Read our guidance on how to ensure you have accurate data ready in time to meet all the reporting deadlines: Employers’ Year End 2022