Are you making the most of Trivial Benefits.

Earlier this year we highlighted the tax concession afforded by the so-called Trivial Benefit rules.

We said:

It is possible to make small tax-free payments to employees, including directors…

Employers and employees don’t have to pay tax on such a benefit if all of the following apply:

• it cost you £50 or less to provide,
• it isn’t cash or a cash voucher,
• it isn’t a reward for their work or performance,
• it isn’t in the terms of their contract.

HMRC describes these payments as a ‘trivial benefit’.

You can’t receive trivial benefits worth more than £300 in a tax year if you are the director of a ‘close’ company. A close company is a limited company that’s run by 5 or fewer shareholders.

Readers who manage a business may want to integrate a formal process into their benefits strategy to take advantage of this opportunity.

Every little helps.