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.

Lee Coccaro
lee.coccaro@bdo.co.uk