Tax free trivial benefits

[SueEllen]

Christmas turkeys and flu jabs. My whole financial outlook is revitalised by this wonderful news.

If I buy my co-director flowers and chocolates for Valentines Day from the company, rather than from me, will she still kiss me, or will she kiss the company chequebook?

She will think you are mean and tight fisted.

So don't tell her ever.

[BigRed]

Mine always goes for the chequebook.

[WordIsBond]

Christmas turkeys and flu jabs. My whole financial outlook is revitalised by this wonderful news.

If I buy my co-director flowers and chocolates for Valentines Day from the company, rather than from me, will she still kiss me, or will she kiss the company chequebook?

[john@UKCA]

Trivial Benefits

Maybe exempt for P11D tax but still chargeable to Class1 Nic at the moment

[Pondlife]

In addition, there is a further restriction which only applies to close companies and where the benefit is provided to an individual who is a director or other office holder (or a member of their family or household). In this case, the exemption is capped at a total cost of £300 in a tax year.

From the OPs site

[Maslins]

From what I've read, I don't think this is much to get excited about.

The theory is you'd be able to for example give a £20 bottle of wine/bouquet of flowers to a staff member as a gift from the company, without it being a taxable benefit in kind for them.

Think of it like the £150 per person per year allowance for staff entertaining before that becomes a taxable BiK.

No doubt means we'll start to get loads of questions on here from people trying to work out exactly how they can maximise every penny they can get from the new rules, as obsession with tax saving exceeds any other rational logic

[northernladuk]

Just for clarity would you care to expand how this affects us? Is it for a Husband and Wife only set up where the wife is employed as a tax dodge to carry out company duties or could I as a single director of my LTD have any part of this?

Does it require the 'employee' to have a contract of employment etc?

[Mike@HWCA]

From 6 April 2016 there will be an update to with a statutory definition of what can be <mod snip> Benefits in kind have been free of tax for some time, subject to HMRC’s discretion but it has always been difficult to define exactly what constitutes a “trivial” benefit meaning employers often pay more tax due to misinterpretation. Therefore this change should be welcomed by employers and employees.

In order to be treated as “trivial” the benefit must satisfy the following conditions :

- Provision can not be more than £50
- Provision must not be in the form of cash or a cash voucher
- The employee must not be entitled to the benefit as part of any contractual agreement
- The benefit must not be provided in recognition of any particular service performed by the employee

This is a welcome reform which should remove a fair amount of “red tape”.