Trivial Benefits - payable per company/directorship?

[pastie321]

Can anyone please tell me if the £50 per gift/max. £300 annual Trivial Benefit exemption is at an individual level or is this per close company for which I hold a directorship?

I've read the HMRC publication on this and can see no mention of this specific point - the small extract below is open to interpretation:

"Section 323A ITEPA 2003 sets out a statutory exemption for trivial benefits. Under this exemption, if an employer provides a benefit to its employees, the benefit is exempt from tax as employment income if all the following conditions are satisfied:

- the cost of providing the benefit does not exceed £50 (or the average cost per employee if a benefit is provided to a group of employees and it is impracticable to work out the exact cost per person) (see EIM21865)
- the benefit is not cash or a cash voucher (see EIM21866)
- the employee is not entitled to the benefit as part of any contractual obligation (including under salary sacrifice arrangements) (see EIM21867)
- the benefit is not provided in recognition of particular services performed by the employee as part of their employment duties (or in anticipation of such services) (see EIM21868)

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 a member of their family or household) the exemption is capped at a total cost of £300 in the tax year."

Thank you.

[northernladuk]

What did your accountant suggest?

[pastie321]

Not asked him yet - thought I'd see what the consensus was from the great and good here first.

Obviously I'll be asking for clear guidance from the person I pay for a professional service

[WordIsBond]

I don't see the 'open to interpretation' part here. A close company can give trivial benefits, capped at £300, to a director / office holder. It says nothing about what other companies may do.

This is talking about what a company can give, not about what an individual may receive. The cap is on the cost to the company. There is no cap mentioned on what an individual can receive from this and other companies.

[pastie321]

I don't see the 'open to interpretation' part here. A close company can give trivial benefits, capped at £300, to a director / office holder. It says nothing about what other companies may do.

This is talking about what a company can give, not about what an individual may receive. The cap is on the cost to the company. There is no cap mentioned on what an individual can receive from this and other companies.

My interpretation is the same as yours....but I wanted to see if anyone here had a different understanding. Will see what my accountant thinks.

[northernladuk]

My interpretation is the same as yours....but I wanted to see if anyone here had a different understanding. Will see what my accountant thinks.

Could you post what their response is for reference please?

[pastie321]

Could you post what their response is for reference please?

I certainly will

[pastie321]

Confirmed by my accountant:

Your interpretation is indeed correct in the sense that the trivial benefits allowance is allocated to the company itself and not the individual so the £300 per limited company rule will still apply to the second company you have incorporated.

Not a biggie but as King 'arold once said, "tis better than a poke in the eye with a sharp stick"

[Craig@Clarity]

Yep. £300 cap per director per company at no more than £50 a time i.e. 6 x £50. Per tax year so resets after 5 April. Must not be cash or cash vouchers. Starbucks or other beverage gift cards randomly are good!

[SimonMac]

Does anyone actually bother with the trivial benefits? How much differences for £300 a year mean to an average contractor.