Newsletter Spring 2016

Trivial benefits

When you give a bunch of flowers to your employee to say 'congratulations' or 'get well soon', do you expect them to be taxed on the value of those flowers? No, of course not. HMRC agree that such trivial benefits should not be taxed, but this is an unofficial rule applied by concession only.

From 6 April 2016 the law will be changed to make it clear that employees are not taxed if they receive a gift from their employer worth up to £50. There are restrictions – the gift must not be cash or a voucher that can be converted into cash.

To prevent family companies from taking advantage of this tax-free benefit, the directors of those companies won't be able to receive more than £300 of trivial benefits in one year. This cap will also apply to each of the director’s family members.