Do your regularly buy your staff a takeaway coffee or a lunch treat? Or there may be special occasions when you want to give them a small gift. But how would you account for this as a business?
In today’s competitive job market, businesses are constantly seeking innovative ways to attract and retain top talent. While salary, career growth opportunities, and work-life balance are crucial factors, companies have started to recognise the importance of trivial benefits in enhancing employee satisfaction and productivity. Trivial benefits are small, low-cost perks that may seem inconsequential at first, but can have a significant impact on employee morale and overall well-being.
Trivial benefits can work wonders in boosting employee engagement. By providing small tokens of appreciation, such as snacks, coffees, or occasional team lunches, employers create a positive work environment. These gestures make employees feel valued and recognised for their efforts, leading to increased motivation and loyalty and reinforce a positive company culture.
Employers can provide trivial benefits such as small gifts and entertainment without having to include these within PAYE settlement agreements or disclose on P11D forms. There are statutory exemptions 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); and
- 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)
You can find out more about the conditions to be satisfied for trivial benefits here
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