A ‘trivial benefit is something you give to an employee, such as a bottle of bubbly, flowers, or a non-cash gift voucher.
If the gift falls within HMRC criteria there is no tax or national insurance to pay for either you (as employer) or the employee receiving it. And what’s more, the cost will also be allowable against corporation tax. And as a Director, you are also eligible!
For example, you could give 6 of your staff a £50 non-cash gift voucher each, costing you £300. But as long as the gift falls within HMRC criteria, you would get £57 back as a reduction in your corporation tax and there will be no national insurance to pay.
The rest of this article tells you more.
This is what they say:
For a gift to be considered a trivial benefit, the following 4 conditions must all apply:
One where you can exchange the voucher for cash. So in the UK, they’re rare so you’d be ok with most vouchers, for example one from M&S.
Giving an employee a gift for ‘good performance’ or to celebrate the Salon having its busiest month are both rewards for work or service, so HMRC would see this as a salary or bonus. So be careful what you say the gift is for. It’s perfectly fine to give a gift to celebrate a birthday or (silly as it sounds) just the fact that it’s sunny! As long as it’s not connected to how well the employee is doing work-wise.
HMRC give a number of examples in their guidance; the basic one being:
Employer A takes a group of employees out for a meal to celebrate a number of birthdays. Five employees attend the meal at a total cost to employer A of £240. Individual employees make different menu and drink selections. Rather than undertake a detailed analysis of the bill you should accept that the cost per head is £48, reflecting an average amount of £240/5.
The benefit of the meal can be covered by the exemption since the cost for each individual does not exceed the trivial benefit financial limit.
Remember, as a Director you are also an employee and so can also be given a trivial benefit. The rules are just the same however there is a total limit each year for Directors which you need to watch, which is £300 in each tax year. So this could be 6 x £50, or 12 x£25. As long as each is £50 or less, and the total of them in the year is £300 or less.
Trivial benefits can be a good tax-efficient way to give something extra to your staff at any time of the year. Some salons are now giving these to staff instead of the xmas party (or in some cases as well as). Just make sure you stay within the HMRC criteria!
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The very handy on-line HMRC calculator shows how much statutory minimum holiday each of your employees is due each year – in both days and hours. Vital for staying within the law!
But it’s suddenly disappeared!
The reason is simple. There have been a number of court cases recently, which if you input the details into the calculator, it might not generate the correct answer!
So work is on-going by HMRC to fix it and hopefully we’ll see it up again soon.
The latest figures just published by Companies House show an increase of 2% in Accounts being filed late for 2018 .
According to Companies House, 223,640 companies were late to file their accounts, with the worst areas being London, Birmingham and Manchester.
Companies House are stepping up both how quickly they fine companies and chasing them for the money.
Current fines are:
< 1 month late £150
1-3 months late £375
3-6 months late £750
6 months late £1,500
We submit all of our Client’s Accounts for them to Companies House, so they don’t need to concern themselves with these things!
This has been the biggest change we’ve ever seen to HMRC reporting and has caused numerous headaches to accountants throughout the UK. And with more changes still to come, we continue to follow the progress of HMRC’s numerous updates on the subject.
Still, we’re celebrating this achievement!
If you want to know more about MTD, have a look here:
Over the summer (and Christmas), many Salons take on temporary staff to fill holiday jobs; and like other employees, these seasonal workers have to be assessed to see if they qualify for automatic enrolment into a workplace pension.
Assessing these types of staff can take more time because of varying hours and earnings.
Employers who know their staff will be working for them for less than three months can use the ‘postponement’ option – which effectively puts off the need to assess them for three months.
During this postponement period, employers will not need to put staff into a pension unless they ask to be put into one. The Pensions Regulator has an online tool to help employers who have seasonal or temporary workers:
Clients who have our payroll service can leave this to us!