Mother’s Day (Trivial Benefits)

Does your mother work for you?

The trivial benefit exemption could be a tax-efficient way to treat your mother this Mother’s day – 31st March 2019.

What qualifies as a trivial benefit? Employers that provide a gift or expense to their employee or director, under a statutory exemption.

All of the conditions below have to be met in order to qualify as a trivial benefit:

  • Cannot exceed £50
  • Cannot be cash or a cash voucher
  • Is not a salary sacrifice or part of a contractual agreement
  • Is not a reward

If only a few of the conditions are met, this will need to be taxed through payroll or a P11D will need to be completed.

When determining the price of a trivial benefit the VAT inclusive amount should always be used, and if the benefit is included within a bulk purchase, the employer must establish an average price.

HMRC do not need to be informed of trivial benefits; however, HMRC has the right to check your businesses records at any point, if they decided to do this, they will usually contact you by letter and request a phone call.

During this phone call, they are likely to ask relevant questions in regards to the record-keeping of the business to ensure you are meeting your legal responsibility.

There must be a clear record of trivial benefits and include the dates, details, amount and evidence/ receipts of the expense. All records must be kept for at least 3 years.

‘Being a full-time mother is one of the highest salaried, jobs since the payment is pure love’

Appreciation, however, should not be limited to one day a year! Why not treat your mother to a spontaneous gift, as there is no limit to trivial benefits for employees. However, trivial benefits for directors are capped at £300.

Amy Manvell PJCO Peter Jarman
Amy Manvell
Charles Lyell

Never call an accountant a credit to his profession; a good accountant is a debit to his profession.

Charles Lyell