Giving your employees benefits and not sure if you have to pay tax on them?

If the benefit meets ALL the following conditions then you do not have to pay tax:

  • The benefit cost you £50 or less to provide
  • The benefit is not cash or a cash voucher
  • The benefit is not a reward for their work or performance
  • The benefit is not in the terms of their contract.

If these conditions are met the benefit is a ‘trivial benefit’ and you do not have to pay tax or National Insurance on them, or even let HMRC know.

However, if the criteria are not met, you have to pay tax on the benefits, most commonly:

  • Company cars
  • Health insurance
  • Travel and entertainment expenses
  • Childcare.

If you need more information visit this HMRC web page or call Vincent & Co on 01803 500500.