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 business’s 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.