The trivial benefits exemption lets you give staff and directors small tax-free gifts completely free of tax and National Insurance. Here's how the trivial benefits rules work and how to avoid the pitfalls.
The trivial benefits exemption is one of the most under-used allowances in UK tax — a simple way to reward staff (and yourself, as a director) with tax-free gifts, without triggering tax or National Insurance. Here's how to use the trivial benefits exemption correctly.
What counts as a trivial benefit?
You can give employees — including yourself, if you're a director — small non-cash perks completely tax and NI free under the trivial benefits exemption, provided all of the following apply:
- It costs £50 or less per person, per gift (including VAT)
- It is not cash or a cash voucher (gift cards are fine, as long as they're not exchangeable for cash)
- It is not a reward for work or performance
- It is not written into a contract or salary sacrifice arrangement
The £50 cliff-edge in the trivial benefits rules
This is the detail that catches people out: if a gift goes even slightly over £50, the whole amount becomes taxable under the trivial benefits rules — not just the excess. A £52 gift isn't "£2 of tax," it's the full £52 treated as a taxable benefit. Keep comfortably under the trivial benefits limit.
The director's annual cap on trivial benefits
- Directors of "close" companies (which covers most owner-managed limited companies) have an annual cap of £300 on trivial benefits for themselves and their family/household members.
- Regular employees have no annual cap on trivial benefits — only the £50-per-gift rule applies to them.
Common examples of trivial benefits
- A birthday or Christmas gift
- Flowers for a new baby or bereavement
- A small thank-you gift card
- Tea, coffee, and snacks at work
Worked example
A director buys each of her 4 staff a £45 gift card for their birthday, and separately buys herself three £40 trivial benefits across the year (£120 total). Everything here sits comfortably within the trivial benefits rules: the staff gifts because each is under £50, and her own gifts because £120 is under the £300 annual cap. None of it needs reporting to HMRC.
Common mistakes with the trivial benefits exemption
- Assuming the £300 cap applies to regular employees — it doesn't. It only applies to directors/office-holders of close companies and their families.
- Treating a performance-linked gift as a trivial benefit — a "thank you for hitting target" gift doesn't qualify, however small, because it's tied to performance.
- Not keeping a simple log of what trivial benefits were given, to whom, and when — useful if HMRC ever asks.
FAQs
Can I give myself a trivial benefit as a director?
Yes, but you're capped at £300 per year in total under the trivial benefits exemption, unlike regular employees who only face the £50-per-gift limit.
Do gift cards count as trivial benefits?
Yes, as long as they can't be exchanged for cash.
What happens if a trivial benefit costs £51?
The entire £51 becomes taxable — not just the £1 over the limit — so it's worth keeping a buffer under £50.
Make the most of the trivial benefits allowance
Trivial benefits are simple in principle but easy to get slightly wrong in practice, especially around the directors' rules and record-keeping. We can help you set up a simple system so you claim everything you're entitled to under the trivial benefits exemption without creating a reporting headache later.
Figures correct for the 2026/27 tax year and subject to change. This article is general guidance, not personalised tax advice.