Employers | TRIVIAL BENEFITS

With the recent changes in NIC and a focus on updating Employee Rights we are seeing a wave of new challenges washing over the hair and beauty industry with the cost of employing staff higher than ever.

Whilst we cannot change the tax updates there are a few things that we can consider as an employer to boost morale with other benefits that can be provided to staff, and it is tax free!

You do have to follow the rules for this to qualify as a trivial benefit and HMRC are quite strict on this so always ensure to keep the correct documentation and follow the criteria below.

You don’t have to pay tax on a gift (aka 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 (Important)

• it isn’t in the terms of their contract

This is known as a ‘trivial benefit’. You don’t need to pay tax or National Insurance or let HM Revenue and Customs (HMRC) know.

Directors

Directors of a close company can also benefit from trivial benefits although these are capped at no more than 6x£50 (£300) per year.

What trivial benefits have you treated yourself or staff to this year?

Need help working through this or checking items that qualify then get in touch by emailing hello@thebeautyaccountant.co.uk or want to check out the latest national minimum wage rules see here Employer|National Minimum Wage