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
Charles Lyell

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

Charles Lyell