Sarah Bradford explains how employers can take advantage of the trivial benefits exemption to give tax-free gifts to employees, and highlights some traps to avoid.
As the cost of living crisis deepens, employers may wish to spread a little bit of Christmas cheer by giving employees a small Christmas gift, such as a bottle of wine.
To ensure that the gift is not accompanied by an unwanted tax bill, good use can be made of the trivial benefits exemption. However, it is important that employer clients are aware of when the exemption applies and what traps to avoid to prevent inadvertently triggering a tax liability.
The nature of the exemption
The trivial benefits exemption is found in ITEPA 2003, ss 323A–323C. It provides an exemption from income tax where a benefit is provided to, or on behalf of, an employer to an employee or to a member of the&
