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Reward and retain your staff with trivial Benefits in Kind

Certain types of gifts given to employees could be tax and National Insurance exempt if they meet specific conditions.

Known as trivial Benefits in Kind (BiK), these gifts are not counted as employment income and enjoy tax exemption if the following conditions are satisfied:

  • The cost of providing the benefit does not exceed £50
  • The benefit is not cash or a cash voucher i.e. exchangeable for cash
  • The employee is not entitled to the benefit as part of any contractual obligation, including salary sacrifice arrangements
  • The benefit is not provided in recognition of particular services performed by the employee as part of their employment duties (or in anticipation of such services).

Here are a few other examples of treats you could offer:

  • Store vouchers to staff at Christmas
  • Flowers, chocolates or wine etc. for staff birthdays or any other life event
  • Take staff out for meals, for example, to celebrate a birthday.

Please remember to:

  • Keep detailed records to demonstrate that no benefit is due.
  • Ensure the cost of the benefit is the VAT inclusive amount.
  • Not treat these as a bonus.

Directors of ‘close’ companies, i.e. a limited company with five or fewer ‘participators’, or a limited company of which all the ‘participators’ are also directors, are restricted to a total cost of £300 in the tax year.

Want more advice on rewarding your team in a tax-efficient manner? Contact your Seymour Taylor representative today or email enquiries@stca.co.uk or call 01494552100.

This blog is for guidance only, professional advice should be obtained before acting on any information contained herein. The information was correct at the time of publishing 29th June 2022.