Trivial benefits in kind exemption
Benefits paid to an employee can be classed as non-taxable as long as they meet certain criteria (it then becomes a trivial benefit). Below are a few things to keep in mind when ascertaining whether a benefit is eligible as a trivial benefit.
Criteria for exemption on a benefit are:
- Cost must not be over GBP 50
- Not be in the form of a cash or a voucher redeemable for cash
- Not part of a salary sacrifice or any other contractual obligation
- Not be provided in recognition of particular services.
Contractual Agreement can be interpreted in a few ways:
- Side letter to the main contract
- Staff handbook
- Letter of appointment
- Redundancy agreement
- Employer union agreement
- Legitimate expectation
A legitimate expectation doesn’t necessarily have to be a contractual obligation.
With regards to digital platforms supplied to your employees, such as an app that allows employees access to a service such as employee discounts, there are two ways to which exemption to tax could or could not apply.
- The app itself: the cost of the app must be less than GBP 50 and should meet all criteria to be classed as a trivial benefit.
- Services provided by the app (if the employer is paying for these services): the cost of the services provided must be less than GBP 50 and should meet all criteria to be classed as a trivial benefit.
If you have any questions with regards to the above, please do reach out to your BDO contact.