There is a statutory exemption enabling employers to give their team members a gift without incurring tax charges.
Providing all the following conditions are met the gift will be classified as a ‘trivial benefit’ and will not incur a tax charge for either the employer or the team member:
There is no limit on the number of trivial benefits an employee can receive, except where the benefit is provided to a director or office-holder (or a member of their family or household) of a ‘close company’. In this case an annual cap of £300 per person per tax year applies. Broadly speaking, a close company is one controlled by five of fewer shareholders or a company controlled by any number of shareholders who are also directors.
Employers need to keep records of all trivial benefits given to their team members to demonstrate that the statutory limits have not been exceeded.
If an employer wants to give a gift to a team member which exceeds £50, there are tax implications for both the employer and team member which need to be considered.
If you would like further advice please contact our expert tax team on 0161 476 8276 or email firstname.lastname@example.org.
Posted 25th July 2016
Updated 12th December 2018
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