We’ve got a birthday coming up here at Accounting Clarkes and so in the spirit of giving we thought it would be handy for you to know about Trivial Benefits; in a nutshell a trivial benefit is defined as “a gift from the company which does not have a direct cash value.”
The beauty of the trivial benefit is that it’s not counted towards taxable income or subject to National Insurance and you don’t even need to put it on your P11D. Even better is that as a company director you can gift it to yourself (rules apply – see further down) …Happy Birthday!
Its important to remember a few things before enthusiastically slamming that card down on the shop counter and they are:
- The gift has to be under £50 – anymore and the whole amount is taxable, not just the excess
- It has to be for personal reasons like Christmas or Easter or even a birthday or wedding anniversary but absolutely not work or performance related
- The payment must come from a company bank account, either a debit or credit card is fine and not reimbursed from another method of payment e.g. a personal card
- It can be vouchers as long as they can only be exchanged for goods only such as a store gift card or Amazon voucher and not one that can be exchanged for cash
- If you are a director of a “close” company i.e. a limited company with five or fewer participators (shareholders) who are all directors, you can only claim a maximum of 6 trivial benefits (£300) a year.
And that’s it…so off you go and buy those lovely gifts and if you get a bit stuck (with the accounts, not the gift choosing although we’re pretty good at that too!) give us a call on 07796 954685.