U-turn on proposed new £50 exemption for Trivial Benefits
26 March 2015
A late change to the Finance Bill has seen the postponement of the proposed new exemption for Trivial Benefits*. The proposal would have exempted small benefits of up to £50 from April 2015, provided they were not in recognition of services, part of a contractual obligation or in conjunction with a salary sacrifice arrangement.
Mark Groom, tax partner at Deloitte, comments: “The proposal was well received by employers as a simplifying measure and a means of ensuring consistency between different types of benefit and between different employers.
“Under current rules, which will now continue to apply, it has been necessary for employers to agree with HMRC which benefits they provide count as Trivial. Welfare-focussed benefits seem to be commonly approved by HMRC up to around £50, although not all HMRC Officers will agree to the same limit. While for other benefits, HMRC agreement can depend on the nature and quantum of the benefit concerned.”
Employers who have been seeking to rely on the new exemption from 6 April should now check with HMRC whether or not any benefits they were proposing to provide tax free, can qualify as Trivial under the existing rules.
Notes to editors
* Trivial benefits are benefits in kind costing less than £50 which are not provided in recognition of particular services or as part of a salary sacrifice or otherwise as a contractual obligation. The exemption is intended to cover occasional benefits such as a flowers for a sick employee. However, the proposed definition might have applied more widely to other arrangements, e.g. occasional drinks.
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The information contained in this press release is correct at the time of going to press.
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