What are trivial benefits and are they taxable?
Answered 17 March 2026
Here is a comprehensive answer on trivial benefits and their tax treatment.
Trivial Benefits: Definition and Tax Treatment
What the law says
The statutory exemption (from 6 April 2016)
Section 323A ITEPA 2003 provides that no liability to income tax arises in respect of a benefit provided by (or on behalf of) an employer to an employee or a member of the employee's family or household, provided the following four conditions are all met:
- Condition A: The benefit is not cash or a cash voucher (within the meaning of s.75 ITEPA 2003)
- Condition B: The benefit cost does not exceed £50 (or the average cost per person if provided to a group where individual costs are impracticable to calculate)
- Condition C: The benefit is not provided pursuant to salary sacrifice arrangements or any other contractual obligation
- Condition D: The benefit is not provided in recognition of particular services performed by the employee in the course of their employment, or in anticipation of such services
Additional Condition E — Close companies
Where the employer is a close company and the employee is a director/office-holder (or a member of their family or household), a fifth condition applies: the benefit cost must not exceed the employee's annual exempt amount. The annual exempt amount is £300 per tax year. This cap applies per individual and per employer.
The Treasury has the power to increase the £50 cost limit (s.323A(4)) and the £300 annual exempt amount (s.323B(2)) by order.
Pre-2016 position
Prior to 6 April 2016, there was no general statutory limit below which benefits were not taxable.
HMRC guidance / practice
What counts as a trivial benefit
HMRC confirms the four qualifying conditions under s.323A ITEPA 2003 must all be satisfied. Classic examples include a bottle of wine, a box of chocolates, or a turkey given as a seasonal gift at Christmas.
Cash and cash vouchers
Cash and cash vouchers are never exempt as trivial benefits, regardless of how small the amount. However, non-cash gift vouchers (e.g. a supermarket gift voucher) can qualify for the exemption.
Employer reimbursements
Where an employer reimburses an employee for an expense that would not otherwise be deductible, the reimbursement cannot be covered by s.323A — it is a cash payment taxable as earnings under s.70 ITEPA 2003.
Third-party provision
The exemption also applies where the trivial benefit is provided on behalf of the employer by a third party (e.g. through a management services company within a group), provided the cost is ultimately borne by the employer.
P11D reporting
There is no requirement for an employer to report exempt trivial benefits on form P11D.
National Insurance Contributions
A matching Class 1 NICs disregard was introduced from 28 November 2016 (in paragraph 6(da) of Part V to Schedule 3 of the Social Security (Contributions) Regulations 2001). When a trivial benefit that would ordinarily attract Class 1 NICs (such as certain non-cash vouchers) is exempt from tax under s.323A, it is also disregarded for Class 1 NICs purposes. Benefits provided before that date may still attract a Class 1 NICs liability.
Close company cap — worked examples
HMRC illustrates the £300 cap as follows:
- Example L: A director receives 3 benefits costing £30, £40 and £50 = £120 total. All are exempt.
- Example M: A director receives 7 benefits each costing £50 = £350 total. The 7th benefit is not exempt.
Summary table
| Condition | Requirement |
|---|---|
| Not cash/cash voucher | ✅ Non-cash vouchers can qualify |
| Cost limit | ≤ £50 per benefit |
| Not contractual/salary sacrifice | Must be genuinely discretionary |
| Not performance-related | Must not reward specific services |
| Close company directors only | Additional £300 annual cap |
Citation sources
Note: this guidance has effect for benefits provided from 6 April 2016 onwards. For guidance on HMRC’s approach to trivial benefits for tax years 2015 to 2016 and earlier, see EIM21860. The guidance at EIM21864 sets out the qualifying conditions that determine whether or not a benefit provided to an employee is exempt from tax as a trivial benefit. Where the employer is a close company (see CTM60060) and the benefit is provided to an individual who is a director or other office holder of the com
Part 13 Supplementary provisions Alteration of amounts Alteration of amounts by Treasury order 716 1 The Treasury may by order increase or further increase the sums of money specified in any of the following provisions. 2 They are— a section 179(2)(a) (limit on exception for advances for necessary expenses), b section 241(3)(a) and (b) (incidental overnight expenses: overall exemption limit), c section 264(2) and (3) (annual parties and functions), d section 287(1) (limit on exemption under Chap
reatment. When a trivial benefit that would ordinarily be liable for Class 1 NICs, such as certain non-cash vouchers, is provided to an employee, and this is exempt from tax under section 323A ITEPA 2003, then it will also be disregarded from the calculation of earnings for Class 1 NICs purposes. It should be noted that this only applies to such benefits that are provided after the Class 1 NICs disregard was introduced. Any such benefits provided before that date will, where appropriate, still a
Part 4 Employment income: exemptions Chapter 11 Miscellaneous exemptions Awards and gifts Trivial benefits provided by employers 323A 1 No liability to income tax arises in respect of a benefit provided by, or on behalf of, an employer to an employee or a member of the employee's family or household if— a conditions A to D are met, or b in a case where subsection (2) applies, conditions A to E are met. 2 This subsection applies where— a the employer is a close company, and b the employee is— i a
e right to receive an amount of general earnings or specific employment income in return for the provision of the benefit. 9 Condition D is that the benefit is not provided in recognition of particular services performed by the employee in the course of the employment or in anticipation of such services. 10 Condition E is that— a the benefit cost of the benefit provided to the employee, or b in a case where the benefit is provided to a member of the employee's family or household who is not an e
ceeds the annual exempt amount, none of the benefit that exceeds the cap is exempt (in other words, the total cost of the benefit in question – see Example K). However, the tax treatment of any earlier benefits where the total cost did not exceed the annual exempt amount is not affected. Where more than one trivial benefit is provided on the same day and the order in which they are provided determines whether the annual exempt amount is exceeded, apply the order that is most favourable to the in
Note: with effect from 6 April 2016, a statutory exemption for trivial benefits came into effect. This page explains HMRC’s approach to trivial benefits for tax years 2015 to 2016 and earlier. For tax years 2016 to 2017 onwards, see EIM21864. In some cases you may be asked by an employer to treat a benefit as exempt from tax, on the grounds that the cash equivalent (Section 203(1) ITEPA 2003) of the benefit taxable on the employee (or on each of the employees concerned if there is more than one
Note: this guidance has effect for benefits provided from 6 April 2016 onwards. For guidance on HMRC’s approach to trivial benefits for tax years 2015 to 2016 and earlier, see EIM21860. Section 323A ITEPA 2003 sets out a statutory exemption for trivial benefits. Under this exemption, if an employer provides a benefit to its employees, the benefit is exempt from tax as employment income if all the following conditions are satisfied: the cost of providing the benefit does not exceed £50 (or the av
An employer may ask you to treat a benefit as exempt from tax on the grounds that the cash equivalent (Section 203(1) ITEPA 2003) of the benefit taxable on the employee(s) is so trivial it is not worth pursuing. For instance a seasonal gift from an employer to their employees at Christmas of a turkey,a box of chocolates or a bottle of wine could be regarded as trivial, regardless of the number of employees involved. There is no requirement for an employer to return these benefits on form P11D. I
Note: this guidance has effect for benefits provided from 6 April 2016 onwards. For guidance on HMRC’s approach to trivial benefits for tax years 2015 to 2016 and earlier, see EIM21860. The guidance at EIM21864 sets out the qualifying conditions that determine whether or not a benefit provided to an employee is exempt from tax as a trivial benefit. One of the conditions that has to be satisfied before the trivial benefits exemption can apply is that the benefit is not cash or a cash voucher. How