Trivial benefits: the £50 rule
How to give small perks with no tax and no reporting - explained
The company can give small perks with no tax, no National Insurance contributions and no reporting, provided every condition is met.
The conditions
- Costs £50 or less, including VAT
- Is not cash or a voucher exchangeable for cash (a shop gift card is fine)
- Is not a reward for work or performance
- Is not something the employee is contractually entitled to
Directors of close companies (most owner-managed companies) have an annual cap of £300 of trivial benefits per tax year.
Using it well
Birthday and festive gifts, flowers, a bottle of wine: all fine. Go a penny over £50 and the whole amount becomes taxable, not just the excess, so keep the receipts.
💡 Good to know: The £300 director cap is, for example, six £50 gifts across the year: a small but entirely legitimate perk of running your own company.
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