Trivial benefits
A trivial benefit is a small gift an employer can give with no tax and no National Insurance for anyone, and no P11D entry. It must cost £50.00 or less and pass three further tests, and directors of small companies are capped at £300.00 a year. It is one of the few genuinely free things in the tax system, and getting one test wrong makes the whole value taxable.
Updated 14 September 2026
The four trivial benefits rules #
There is no partial pass. A benefit either meets all four conditions and is completely exempt, or it fails and is taxable in full.
- It cost £50 or less to provide, including VAT
- It is not cash, and not a voucher exchangeable for cash
- It is not a reward for work done or performance
- It is not something the employment contract entitles the employee to
Trivial benefits examples #
The test that catches people out is not the cost, it is the reward test. A £20.00 bottle of wine for someone's birthday is exempt. The same bottle for hitting a target is not, because it rewards work.
| Exempt | Taxable |
|---|---|
| A bottle of wine or a bunch of flowers for a birthday | Cash, or a voucher that can be cashed in, at any value |
| A Christmas hamper costing under the limit | A gift for hitting a sales target, however small |
| A meal out to mark a personal event such as a wedding or new baby | Anything the contract promises, such as a guaranteed birthday gift |
| A store gift card that cannot be exchanged for cash | Working lunches provided during ordinary business |
| Chocolates or a gift when someone is off sick | A single gift costing more than the limit, which is taxable in full |
How many can an employee have? #
For an ordinary employee, as many as the employer wants to give. There is no annual cap at all: twelve £50.00 gifts across a year, one a month, are twelve separate exempt benefits, provided each one passes the four tests on its own.
What you cannot do is dress up regular remuneration as a series of gifts. A monthly £50.00 gift card given to everyone, every month, without occasion, starts to look like pay, and HMRC will treat it that way.
The trivial benefits director cap #
Directors of close companies are treated differently, because otherwise a one-person company could pay itself in hampers. A close company is one controlled by 5 or fewer shareholders, which covers almost every small limited company in the country.
| Cap per benefit | £50.00 |
| Annual cap for a close company director | £300.00 |
| Benefits at the full amount | 6 a year |
| Who the cap covers | The director, and their family and household |
The family point matters and is widely missed. If a director takes £300.00 of trivial benefits and their spouse is also on the payroll as an employee of the same company, the spouse's benefits count against the director's cap where they are provided by reason of the director's employment.
A husband and wife who are both directors have £300.00 each, so £600.00 between them. For a company paying Corporation Tax at 19%, that is £600.00 extracted with no Income Tax, no National Insurance and a deduction against profits. Modest, but genuinely free.
Staff entertaining: a separate exemption #
The annual function exemption is often confused with trivial benefits. It is a different rule with a different limit, and the two can be used in the same year.
| Trivial benefits | Annual functions | |
|---|---|---|
| Limit | £50.00 per gift | £150.00 per head |
| Period | Per benefit, no annual cap except for directors | Per tax year, across all annual events |
| Who | Individual employees | Must be open to all employees, or all at one site |
| Over the limit | Whole value taxable | Whole cost taxable |
The staff entertaining limit of £150.00 is per head for the year, not per event. Two annual functions costing £90.00 and £70.00 a head come to £160.00, over the limit. You can exempt whichever combination of events fits inside £150.00 and tax the rest, so here you would exempt the £90.00 event and tax the £70.00 one.
Cost per head means the total cost of the event including VAT, transport and any overnight accommodation, divided by everyone who attends, including guests who are not employees. Staff entertaining must also be genuinely annual and open to all staff: a directors-only dinner does not qualify however much it costs.
Reporting and records #
Exempt trivial benefits go nowhere. No P11D entry, no PAYE Settlement Agreement, no Class 1A National Insurance. That is the point of the exemption, and it is why the P11D calculator does not include them.
Keep a simple record anyway: what it was, who received it, what it cost and the occasion. A compliance check will ask, and the reward test is a judgement call you want contemporaneous notes on. The HMRC compliance check guide covers what an enquiry actually involves.
Where a benefit fails the tests, it is reportable like any other. The P11D guide explains what that means in practice.
Common questions #
What are trivial benefits?
Small non-cash gifts an employer can give without any tax or National Insurance, and without reporting them. A benefit qualifies if it cost £50.00 or less, is not cash or a cash voucher, is not a reward for work, and is not something the contract entitles the employee to.
What are the trivial benefits rules?
Four tests, and all four must be met. Cost £50.00 or less including VAT, not cash or a cash voucher, not a reward for work or performance, and not contractual. Fail any one and the whole value becomes a taxable benefit.
Is there a limit on trivial benefits?
For most employees there is no annual limit, only the £50.00 cap on each individual benefit. Directors of close companies and their families are capped at £300.00 across the tax year, which is 6 benefits at the full amount.
What is the trivial benefits director limit?
£300.00 a tax year for a director of a close company, meaning a company controlled by 5 or fewer shareholders. The cap covers the director's family and household as well, not just the director.
What are some trivial benefits examples?
A bottle of wine for a birthday, a Christmas hamper, flowers for a new baby, a meal out to mark a wedding, or a store gift card that cannot be exchanged for cash. What they have in common is that none is a reward for work.
Does HMRC check trivial benefits?
The trivial benefits HMRC exemption removes the reporting requirement, not the record. There is no P11D entry and no PAYE Settlement Agreement needed, but you should still be able to show what was given, to whom, what it cost and why, because a compliance check will ask.
What is the staff entertaining limit?
£150.00 per head across all annual functions in a tax year. It is a threshold rather than an allowance: exceed it by any amount and the entire cost becomes taxable, not just the part above the limit.
Can a gift card be a trivial benefit?
Yes, provided it cannot be exchanged for cash. A store or retailer gift card under £50.00 qualifies. A prepaid card that can be withdrawn as cash is a cash voucher and is taxable in full.
Are trivial benefits tax deductible for the company?
Yes. The cost is an allowable deduction against profits for Corporation Tax in the normal way, and the VAT is usually recoverable. The exemption removes the charge on the employee, and does not deny the company its deduction.