Trivial benefits – Staying compliant and saving money on employee gifts
Thinking of buying a gift for a member of staff? Unbeknownst to many, there are government rules in place for this process, which, if not followed, could result in potential unexpected costs. However, they can also be used to your advantage.
Structured correctly, these gifts are known as trivial benefits and are a useful way to treat employees without triggering tax or National Insurance obligations. At the same time, the expenditure qualifies for Corporation Tax relief- meaning for every £50 you spend on a staff gift, the company will save up to £12.50 in Corporation Tax.
20th January 2026
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Matthew Jackson See profile
What is a trivial benefit?
HMRC defines a trivial benefit as a small perk or gift that meets all of the following conditions:
- The benefit must cost £50 or less per employee (including VAT).
- It cannot be cash or a cash voucher (non-exchangeable gift vouchers are fine).
- It must not be a reward for work or performance.
- It must not be included in the employee’s contract or provided under a salary sacrifice arrangement.
If these conditions are met, the benefit is exempt from tax and National Insurance, and you do not need to report it to HMRC.
While these benefits are available at any time during the year (and an unlimited number can be given to staff), most commonly we see business owners using trivial benefits to award birthday or Christmas gifts (such as flowers, chocolates, or a bottle of wine), but these rules would also extend to other small tokens of appreciation during the year if you felt so inclined.
Trivial benefits should not be confused with staff entertaining expenditure, which comes with its own set of rules and obligations attached.
Important restrictions
The following considerations must be kept in mind when giving a gift to an employee:
Trivial benefits limits for directors
Directors of close companies are limited to a maximum of £300 worth of trivial benefits per tax year – i.e. 6 x £50 events. This limit applies only to benefits to yourself, not to other staff.
Non-exemption for salary sacrifice arrangements
Benefits provided through salary sacrifice arrangements are not exempt.
Cost limit for trivial benefits
If the cost exceeds £50, even by a small amount, the entire benefit becomes taxable.
Non-payrolled ‘staff’
These benefits only apply to employees on the business payroll – non-payrolled ‘staff’ would not be covered by this exemption. It is worth noting that HMRC consider benefits provided on a regular basis may create an expectation and are therefore considered contractual.
Making the most of trivial benefit rules
By applying these rules carefully, you can make the most of trivial benefits while remaining compliant. However, incorrectly administering them can result in unexpected costs and reporting obligations.
If you’d like to talk about following and utilising the trivial benefit rules for your own specific situation – get in touch.