Trivial Benefits for Directors at Christmas — What You Need to Know

With Christmas approaching, you might be thinking about treating yourself or your fellow directors to a few festive gifts. Someone may even have suggested using the trivial benefits exemption to give each director £300 of tax-free and NI-free gifts.

It sounds great — but can you actually do it?

Let’s break it down in plain English.

What Are Trivial Benefits?

The trivial benefits exemption, introduced in 2016, allows employers to give small perks to employees without paying tax or National Insurance.

Directors can use the exemption too — but with one key restriction:👉 Directors are capped at £300 per tax year.

The Rules You MUST Follow

For a gift to qualify as a trivial benefit, it must meet ALL of these conditions:

• It costs £50 or less (including VAT) per gift

• It’s not in exchange for work done

• It’s not part of your salary or any salary-sacrifice arrangement

• It’s not cash or something that can be turned into cash

• It’s genuinely a small, no-strings-attached gift

Sounds simple enough — but over the years, HMRC has managed to complicate the straightforward.

HMRC’s Confusing Interpretations

Here’s where things get messy.

HMRC has taken the view that if you give someone a reloadable gift card and simply top it up, the whole thing counts as a single benefit — meaning the entire amount must stay under £50.

That’s… not logical. Anyone can see that each top-up is a separate gift.

But to avoid arguments with HMRC:👉 If you want to use gift cards, give separate cards rather than topping up one card.

Can You Give Multiple Gifts?

Yes. There’s no limit on the number of trivial benefits — only that each gift must be £50 or less, and directors can receive a maximum of £300 per tax year.

However, HMRC sometimes suggests that multiple items given together should be combined.

For example:

• A £50 turkey

• Plus £48 worth of wine

Given together, HMRC argues this is one gift worth £98, and therefore not trivial.

And in fairness, they have a point — splitting a single treat into two to dodge the rules isn’t in the spirit of the exemption.

So What’s Safe… and What Isn’t?

Here’s what works well:

✔ Genuinely separate gifts, each costing £50 or less

✔ Spread over the year

✔ No link to performance or work done

Here’s what to avoid:

✘ Concentrating several gifts at Christmas

✘ Bundling items that clearly form one gift

✘ Reloading one single gift card

Brian’s Practical Tip

If you want to make use of the full £300 director allowance, the safest approach is this:

Provide ad-hoc gifts throughout the year — each under £50 — rather than giving everything at Christmas.

It keeps you well within the rules and avoids unnecessary HMRC fuss.

In Summary

• Directors can receive up to £300 per tax year in trivial benefits

• Each gift must cost £50 or less

• Spread gifts across the year for a smoother ride

• Keep everything genuinely small and non-work-related

Done right, it’s a simple and tax-efficient way to add a little joy to the year — not just at Christmas.