An exception is made to the new provisions for benefits in kind which are classified as ‘Trivial Benefits’. To qualify, these must satisfy three conditions:
- The value must be no more than £50 per recipient, or an average of £50 if the benefit is provided to a group of employees and the exact value to each employee cannot be calculated precisely.
- The benefit must not take the form of cash or cash voucher, though shop vouchers are allowed.
- The benefit must be gratuitous and not provided in consideration of a service which the recipient is employed to provide.
Any other benefits, except for staff functions, will be taxable; and if the value of a Trivial Benefit exceeds £50 the whole amount will be taxed, not just the excess over £50.
For employees who are not directors, there is no limit to the number of Trivial Benefits which can be provided in any tax year. So an employee could receive 6 benefits with a total value of £300 in the same tax year. But this flexibility would not apply to directors.
Being non-taxable, Trivial Benefits need not be reported to HMRC on form P11D