As a director of your own limited company, you can provide yourself and your employees with small, tax-free perks known as “trivial benefits.”

These benefits are exempt from tax and National Insurance as long as all rules are met.

These benefits are becoming more popular and no changes were made in the recent November 2025 Budget.

If the provision of the trivial benefit meets the required conditions, then it is tax free in the hands of the recipient and will not be subject to national insurance contributions.

What counts as a trivial benefit?

A benefit is considered trivial if it meets all of the following conditions:

• Cost is £50 or less (including VAT).
• It is not cash or a cash voucher.
• It is not a reward for work performed or a contractual entitlement.
• It is provided for a genuine non-work-related reason (e.g., birthday, Christmas, thank-you gesture).

Examples of acceptable trivial benefits

• A £30 bottle of wine or chocolates as a gift.
• Flowers or a small gift for a special occasion.
• Gift Voucher (for example Amazon)
• Small seasonal gifts (Christmas, Easter, Birthday, Religious Festivals etc.).

Limits for directors

If you are a director of a close company (most contractor limited companies are), you can claim:

• Up to £50 per benefit, AND
• Up to £300 total per tax year for the director.

This £300 annual cap applies only to directors and only for their trivial benefits, not for employees.

Employees (excluding directors)

Employees can receive multiple trivial benefits with no annual cap, as long as each one stays within the £50 rule and meets the criteria (but we would not advise exceeding the £300 Directors limit for employees).

Important restrictions

• You cannot claim a trivial benefit if it is intended to reward performance or is part of any contractual agreement.
• You cannot reimburse yourself for cash and call it a trivial benefit.
• If the cost exceeds £50 by even £1, the full amount becomes taxable (not just the excess).

How to record trivial benefits

Keep simple evidence such as:

• Receipt for the item.
• Brief note of the occasion (e.g., “Christmas gift”, “Birthday gift”).
• Who received the benefit.

These records support your company accounts in case HMRC requests them.

Why use trivial benefits?

• Tax-free and NI-free for both company and director/employee.
• Fully tax-deductible expense for the company.
• A simple and legitimate way to extract small amounts of value from your company.

If you require any further information, please speak to your Account Manager.