Trivial benefits – tax free birthday presents

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Employers can now give employees small gifts costing up to £50 without fear of a tax bill. This could be for an anniversary, a birthday or because the sun is shining – anything as long as it is not a reward for services.

We originally blogged back in December 2015.

The main rules for gifts to be tax free are:

  • Small gifts are those costing up to £50.  Those costing more then £50 are taxable in full – not just on the excess over £50.
  • The gift can include food and drink, gift vouchers and any gifts but not cash.
  • Cash or vouchers convertible to cash do not qualify for the tax exemption.
  • The benefit must not be given in in recognition of work – so lunch or dinner in recognition of working extra hours or meeting targets remains taxable
  • The gifts must not be given habitually
  • There is no limit on the number of gifts for a employee
  • Directors can only benefit from the trivial benefits exemption from tax for gifts costing up to £300 per tax year

One word of warning, trivial benefits are exempt from income tax from 6 April 2016 but are only exempt from Class 1 NIC from 16 September 2016.


As with all of our tax tips and web pages this information is necessarily summarised and of a general nature.  If you would like detailed specific advice please contact us.