Trivial Benefits: What are they and how to use them

Generally speaking, a team who feel valued and well looked after will in turn be more inclined to work hard and produce greater results. Therefore, implementing a smart and cost-effective way to improve morale and strengthen engagement is a no brainer. That’s where trivial benefits come in.

These small, tax-efficient perks may be modest in value but when used well, they can make a measurable difference to employee motivation, retention and culture.

So what are trivial benefits?

A trivial benefit is a tax-free, non-cash perk provided to employees that doesn’t trigger Income Tax or National Insurance Contributions (NIC’s), providing it meets specific criteria set by HM Revenue and Customs.

Under HMRC trivial benefits rules, a benefit qualifies if:

- It costs £50 or less (including VAT)

- It’s not cash or a cash voucher

- It’s not a reward for work or performance

- It’s not included in the employee’s contract

- It’s not provided through a salary sacrifice agreement

- It’s not provided as a reward for long service

- It’s not provided for a team-building day

Providing these conditions are met you don’t need to report the benefit to HMRC or pay tax or National Insurance on it.

It’s important to remember that the term ‘trivial’ refers simply to the value of the benefit, and not the impact it has.

Understanding the trivial benefits allowance

One of the most common questions employers ask is, ‘How many trivial benefits in a year can I give?’ And the answer is, there is no cap on the number of trivial benefits an employee can receive as long as each individual benefit doesn’t exceed £50, and the benefit meets all the above HMRC criteria.

It’s important to note however, that there’s one exception: For directors of close companies (typically limited companies with five or fewer shareholders) there is a trivial benefits allowance of £300 per tax year. For example, a director could receive six lots of £50 benefits, or any other combination that doesn’t exceed £300 in total.

Trivial benefits example list

Here are some common trivial benefits examples that you may like to consider:

- Workplace pizzas for a team lunch

- A birthday meal out

- A bunch of flowers

- A box of chocolates

- A bottle of wine

- Seasonal hampers

- Small celebration cakes

- Welcome or leaving gifts

- Gift cards

But don’t forget, if the benefit is given as a reward for hitting targets, completing a project or exceptional performance, it doesn’t qualify as a trivial benefit.

Trivial benefits gift cards: What you need to know

One of the most popular options for trivial benefits is to offer employees trivial benefits gift cards. In order to qualify these must be non-cash vouchers, redeemable for goods or services only, and worth £50 or less. For example:

- Retail gift cards

- Supermarket vouchers

- Restaurant e-Gifts

- Digital prepaid cards restricted to retailers

When it comes to managing and distributing trivial benefits gift cards, BHN Extras make it easier for employees to send compliant, non-cash rewards to staff digitally. Click here to find out more.

Why trivial benefits for employees matter

Businesses with higher levels of employee engagement experience 21% higher productivity levels and 23% greater profitability, not to mention lower rates of absenteeism. As a result, employees of happier staff typically experience better compliance with safety standards and fewer workplace accidents.

It has been proven that frequent appreciation reinforces positive workplace culture and strengthens emotional connection. Trivial benefits can also be tailored or personalised to the individual receiving them, therefore feeling more authentic and genuine. A small thoughtful gesture demonstrates appreciation and fosters a sense of value and belonging. In the long run, this can lead to a team that feels motivated and more likely to remain loyal to you and your organisation.

Strategic ways to use trivial benefits in the workplace

To make the most of your trivial benefits allowance try to think beyond ad hoc gifting, instead choosing to use them intentionally.

Seasonal occasions

Seasonal gestures are an excellent use of trivial benefits for employees as they demonstrate inclusion and recognition of diverse cultural celebrations. Examples include:

- Christmas hampers

- Easter treats

- Diwali sweets

- Ramadan gift boxes

- Summer BBQ contributions

- Seasonal flu jab vouchers

Seasonal trivial benefits are also easy to personalise and really take each member of your team into consideration. If, for example, you know a member of staff is dairy-free, or vegan, you can easily opt for dairy-free and vegan alternatives.

Celebrate personal milestones

Recognising personal life events builds connection and loyalty, and lets your team know that you are conscious of the milestones they achieve outside of work.

- A birthday with gift cards

- An anniversary with flowers

- A new baby with baby items

- A new home with a plant or photo frame

- A loss with flowers

- A wedding with gift cards or vouchers

Welcome and farewell gestures

First and last impressions matter. When a new person joins your team the first impression you make will be lasting, so ensure it’s positive and sets the right tone for your working relationship moving forwards.

Alternatively, a gesture to show appreciation and thanks when a team member leaves is just as important as it will affect the way in which you’re spoken about in the future.

A welcome gift card or voucher for a new starter, or a farewell bottle of wine for a departing colleague, both qualify as trivial benefits and ultimately paint you in a great light.

Supporting employees during cost-of-living pressures

It’s no secret that a significant number of UK households are experiencing financial challenges today. Therefore, small gestures can make a huge difference in a number of ways, such as:

- Help with weekly food shops

- Offsetting fuel costs

- Supporting family expenses

Digital supermarket or retail vouchers (such as those delivered through platforms like BHN Extras) can give employees the freedom to spend their benefits on groceries, household essentials and everyday purchases.

Can you claim VAT on trivial benefits?

If your business is VAT registered, the benefit was purchased for business purposes and the VAT is properly itemised then yes, in the majority of cases you can reclaim VAT (provided the benefit qualifies as a business expense and isn’t treated as business entertainment).

VAT recovery is usually blocked on ‘business entertainment’ and gifts to employees (rather than clients) are often recoverable.

Because VAT treatment can vary based on context it’s advisable to confirm with your accountant or tax adviser to ensure full compliance.

Managing trivial benefits

For larger and growing organisations it can become difficult to manage trivial benefits manually. It’s for that reason the BHN Extras rewards platform is so popular, as it helps simplify the process and allows employers to offer instant benefits to all team members whilst being mindful of the HMRC limits.

Click here to find out how employers are using BHN Extras to schedule and distribute rewards automatically without adding to your administrative workload.

Breakdown of benefits

Here’s a quick reminder of the benefits to your team:

- Improved morale and willingness to work hard

- Better workplace culture

- Less workplace accidents

- Job satisfaction

And the benefits to your business:

- Improved productivity

- Improved profitability

- Lower rates of absenteeism

- Higher rates of staff retention

- Happier workforce without adding payroll complexity

Are you ready to unlock the everyday perks of trivial benefits?

If you’d like to explore how trivial benefits gift cards and flexible rewards can enhance your employee benefits strategy, BHN Extras can help. Our platform gives employers access to a wide range of everyday perks designed to help organisations reward staff easily whilst staying within the HMRC trivial benefits rules.

To find out more click here, call 0208 1459 9430 or send an email to enquiries@workplaceextras.com

Trivial benefits FAQs

What are trivial benefits? +

Trivial benefits are small, non-cash perks that employers can provide to staff without triggering Income Tax or National Insurance.

What are the HMRC trivial benefits rules? +

The trivial benefits HMRC rules state that a benefit qualifies if it costs £50 or less, is not cash, is not included in an employee’s contract, and is not given in exchange for work or performance. If these conditions are met, the benefit does not need to be reported to HMRC and is exempt from tax and National Insurance.

How many trivial benefits in a year can employees receive? +

For most employees there is no limit, provided each benefit meets the HMRC criteria and stays under the £50 threshold. However, directors of close companies have a trivial benefits allowance of £300 per tax year. These benefits are often used for small workplace moments such as a Christmas party, where low-value gestures can still qualify under the rules.

What is the trivial benefits allowance for Directors? +

For directors of close companies, HMRC applies a trivial benefits allowance of £300 per tax year. This means directors can receive multiple benefits throughout the year, as long as the combined value does not exceed £300 and each individual benefit is worth £50 or less.

Do gift cards qualify as trivial benefits? +

Yes, trivial benefits gift cards can qualify under HMRC rules if they are non-cash vouchers redeemable for goods or services and worth £50 or less. Many employers use digital platforms such as BHN Extras to send compliant gift cards quickly and easily.

What is an example of a trivial benefit? +

A typical trivial benefits example might include a birthday present, a small bunch of flowers, a seasonal hamper, or pizza for a team lunch. Retail or supermarket vouchers under £50 are also common trivial benefits for employees when they meet the HMRC criteria.

Why are trivial benefits for employees important? +

Trivial benefits for employees may be small in value, but they can significantly improve employee morale, motivation and workplace culture. Regular gestures of appreciation can help strengthen engagement and retention, particularly when they are personalised and delivered at meaningful moments.

Can trivial benefits be given as rewards for performance? +

No. Under HMRC trivial benefits rules, a benefit cannot qualify if it’s provided as a reward for meeting targets, completing a project or outstanding performance. In those situations the benefit may be considered taxable. However, they can still be used for social occasions such as a staff party or to recognise milestones like long service awards, provided the HMRC criteria are met.

Can you claim VAT on trivial benefits? +

In most cases, VAT can be reclaimed if the business is VAT registered, the purchase was made for business purposes and the VAT is properly itemised. However, VAT treatment can vary so it’s best to confirm with an accountant or tax adviser.

How can employers manage trivial benefits efficiently? +

Managing trivial benefits manually can become difficult as employers must track who has received benefits and ensure the £50 limit is not exceeded. Platforms such as BHN Extras help businesses automate the distribution of trivial benefits gift cards and rewards whilst staying compliant with HMRC rules.

How to use trivial benefits in the workplace