30 June 2026
Trivial benefits are low-cost perks that employers can give to employees without creating a tax or National Insurance charge. They are designed to cover small gestures of goodwill, rather than anything linked to pay, performance, or contractual entitlements.
You don’t have to pay tax on a benefit for your employee if all of the following apply:
- it cost you £50 or less to provide
- it isn’t cash or a cash voucher
- it isn’t a reward for their work or performance
- it isn’t in the terms of their contract.
One important point to remember is that the £50 limit is strict. If the cost goes even slightly over, the whole amount becomes taxable, not just the excess. That makes it especially important for employers to keep an eye on the full cost, including VAT, when applying the exemption.
It’s also worth noting that the £50 threshold has not changed since it was introduced in 2016. With the rising cost of living over recent years, this fixed limit arguably no longer stretches as far as it once did, and there is a growing sense that it may need reviewing to remain practical for employers.
There’s no overall limit on how many trivial benefits an employee can receive during the year, which gives employers flexibility to provide occasional treats or gestures. However, there is an exception for close companies (typically those controlled by a small number of directors), where a £300 annual cap applies.
In practice, trivial benefits are intended for situations that support general staff wellbeing or morale. Typical examples might include giving employees a bottle of wine or a box of chocolates at Christmas, or sending flowers to mark a personal event such as a bereavement or the birth of a child. What they shouldn’t be used for is anything that looks like a reward for doing the job, for example, giving a gift to the top salesperson would not qualify, because it’s clearly linked to performance.
Meals and drinks often cause confusion. In some cases, they can fall within the trivial benefits rules, particularly where it’s difficult to work out the exact cost per person. HMRC accepts that using an average cost is reasonable, as long as it comes to no more than £50 per head. For instance, if a group of employees go out for a meal costing £240 in total for five people, an average of £48 each would be acceptable and could qualify.
However, the context matters just as much as the cost. The exemption only applies where the occasion is genuinely social, such as celebrating birthdays. If the same meal were linked to work, for example, a performance discussion, a team meeting, or a working lunch, then this would not qualify as a trivial benefit, even if the cost was under £50. In those cases, different rules may need to be considered instead.
It’s also worth remembering that trivial benefits are not intended to replace salary or bonuses. HMRC is clear that employers cannot use them as a way to avoid tax and National Insurance on normal earnings.
Finally, employers should be aware that there are other, separate exemptions for staff entertainment. For example, annual events like Christmas parties or summer functions fall under a different rule, with a higher limit of £150 per head. This total includes the cost of VAT and any cost of transport and/or overnight accommodation if these are provided to enable employees to attend. These must be recurring annual events and open to employees generally. However, this limit has remained unchanged since 2003, which again raises questions about how well it reflects current costs. As with trivial benefits, if the £150 threshold is exceeded, the full amount becomes taxable.
Trivial benefits are a useful and flexible way for employers to offer small gestures to employees without tax implications, but they work best when kept simple and genuinely incidental. As long as the benefit is low in value, not connected to work performance, and not part of contractual arrangements, it can usually be provided tax-free. That said, with the thresholds unchanged for many years, employers should be mindful that what counts as trivial in practice may be shifting, making careful planning and awareness of the rules more important than ever.
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