Trivial Benefits: How to Treat Directors and Employees Without Triggering Tax
If you’re looking for a simple way to reward staff or directors with the occasional small gift, trivial benefits are a tax-free, no-fuss option – as long as you follow the rules.
Here’s what you need to know, including examples and some helpful tips to stay compliant.
What is a Trivial Benefit?
A trivial benefit is a non-cash gift that meets all of the following criteria:
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The gift costs £50 or less, including VAT
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It is not cash or a cash voucher (e.g. a store gift card is fine, but not prepaid credit)
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It is not a reward for work or performance
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It is not part of any contract or salary sacrifice scheme
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It is not given regularly or expected as a routine perk
If all of these conditions are met, there’s no tax, National Insurance, or reporting required – making it a great way to give a little something back.
Special Rules for Directors
If you’re a director of a close company (one with five or fewer shareholders), there’s an extra rule:
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You can receive up to £300 of trivial benefits per tax year
Each individual gift must still be £50 or under, and you can’t go over the £300 cap without triggering tax on all of it.
If your company isn’t a close company, this cap doesn’t apply – but all the other rules still do.
What About Employees?
For employees, the £50 per benefit rule still applies, but there’s no overall limit to the number of trivial benefits they can receive – as long as each one is genuinely occasional and meets the conditions.
You might use these for things like:
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Birthdays
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Work anniversaries
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Thank-yous after a busy period
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A small gesture after a personal event (like moving house)
Director Voucher Examples
Here are six practical, reasons a director might receive a voucher during the year:
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Coffee shop voucher – a treat after completing year-end accounts
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Bookstore voucher – to encourage a long weekend switch-off
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Deli voucher – mid-year morale boost
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Garden centre voucher – marking the start of spring
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Cinema voucher – thank-you for supporting staff training
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Restaurant voucher – celebrating the company’s anniversary
Each must be under £50, and the total mustn’t exceed £300 per tax year. They must not become routine or expected.
What If You Give the Same Each Year?
It might be tempting to give directors the full £300 of vouchers every year – six at £50, neatly spaced out. But be careful.
If HMRC sees:
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The same amount claimed each year
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Similar timings
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No variation in reason or type of voucher
…they may argue the gifts have become regular and expected, which breaks the rules. In that case, the full value could be taxed and reported.
Best practice: Vary the timing, reason, and even value year to year. Make sure each benefit is genuinely spontaneous and not a set routine.
Final Tips
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Always keep a record of each gift: date, amount, reason, and who received it
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Don’t exceed £50 per benefit
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Don’t exceed £300 per tax year for close company directors
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Avoid giving benefits that form a pattern or feel expected
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Stick to non-cash vouchers or tangible gifts
Need Help Planning or Tracking Trivial Benefits?
We’re happy to help you plan tax-free staff and director gifts the right way – or even build a tracker (in Xero) to help you stay within the limits. Get in touch and we’ll make sure it’s done properly.
About Love Accountancy – Your local accountant, nationally
At Love Accountancy, we help small businesses make confident financial decisions with clear advice, practical tools, and a friendly, straight-talking approach. Whether it’s understanding tax rules, managing cash, or planning for growth, we’re here to make things easier — and maybe even enjoyable.
Need help applying the trivial benefits rules in your business? Get in touch — we’d love to help.