Trivial Benefits

Did you know you can take tax free money from your limited company? Read on to find out more…
 
You don’t have to pay tax on a benefit for your employee 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 

 
This is known as a ‘trivial benefit’. You don’t need to pay tax or National Insurance or let HM Revenue and Customs (HMRC) know.
 
Directors of ‘close’ companies
You can’t receive trivial benefits worth more than £300 in a tax year if you’re the director of a ‘close’ company.
 
A close company is a limited company that’s run by 5 or fewer shareholders.
 
As a director or employee this would mean you could take up to 6 trivial benefits of £50 in a tax year.
 
A few favourites of our clients are;
 
Vouchers for Amazon, air b&b or even B&Q – wherever you choose.
 
Where the employer is a close company, trivial benefits provided to a director or office-holder (or to a member of their family or household) are capped at a total cost of £300 per year (and subject to the £50 cap on each individual benefit).
 
Where the family or household member of a director or office-holder is also an employee of the company, they will be subject to a £300 cap in their own right.
 
This £300 yearly limit is separate to the exemption for annual events, such as Christmas parties or summer BBQs. For such events, you may be able to claim up to £150 per employee and is separate to the trivial benefits rules.
 
Please note, if your limited company is currently dormant then you would not be able to take trivial benefits as the company is not trading.
 
Contact us if you’d like to learn more:
Email: info@jacksonstapleton.co.uk
Phone or WhatsApp: 01724 786112