Using gift cards as a non-taxable trivial benefit
22 Sep 2021
Trivial benefits can save you up to £48.10 per reward that you give.
What is a trivial benefit?
In April 2016, HMRC introduced trivial benefits to allow businesses to gift staff small perks, such as birthday and Christmas presents, without paying tax or national insurance on them.
Of course, there are some limitations to non-taxable perks which are defined below.
- Must cost you £50 or less per employee
- Cannot be cash – this includes a cash voucher
- Is not given as a reward or incentive
- Is not mentioned in an employee’s contract as a perk
- Directors of ‘close’ companies do not exceed £300 per year
Can I give gift cards as a trivial benefit?
If you give gift cards to your employees for occasions such as birthdays and Christmas, then you can, and you should, be giving them as a trivial benefit – not a benefit-in-kind.
Don’t get caught out however with cash-based gift cards, for example prepaid Mastercards. These will come under HMRC’s “it is not cash” exempt rule.
There are occasions throughout the year, and at various milestones where you can give your employees a gift card, up to the value of £50, and record it as a trivial benefit:
- Calendar days such as Easter, Valentine’s Day, Mother’s Day etc.
- Wedding or engagement presents
- Anniversary gifts – not work anniversaries though as this is deemed as a reward
- New baby or Christening gifts
- Housewarming gifts
- Welcome and farewell gifts
- Bank holiday treats
- Lunch, dinner or drinks with colleagues
- Refreshments out of the office, such as coffees and teas
- Purchasing new work attire ahead of new business pitches or events
How many trivial benefit gift cards can I give in a year? Is there a limit?
There are no limits on how many trivial benefit gift cards your business can hand out, however you must stick to the rules. That means each gift card must not cost more than £50 per employee.
Theoretically, you could give each employee a £50 gift card every day of the working year. However, HMRC would no doubt view this activity as suspicious, and it would be hard to justify that the trivial benefit wasn’t truly a reward or benefit-in-kind.
Make sure your trivial benefit gift card doesn’t go over £50 either – even if it’s by 1p. HMRC will make you pay tax and national insurance on the full amount, not just on the penny.
How much could my business save if we used gift cards as trivial benefits?
Ad hoc gifts that go through payroll may end up getting mixed up in tax and national insurance. However, presenting these items as a gift card makes it a lot easier to identify the trivial benefits, against the non-trivial benefits. By recording these correctly, your business could save up to £48.10 each time!
Which Blackhawk Network products could I give as a trivial benefit?
One4all Gift Cards
One4all is our multi-retailer gift card that provides the choice of over 140 brands to spend with. Ideal as a gift card to distribute en masse, as the wide variety of retail categories means there is something for everyone.
What occasions could I give a One4all gift card as a trivial benefit?
Birthdays – employees will appreciate the flexibility of where, when and how they spend their birthday gift
Christmas – One4all gift cards work well for large and diverse workforces during the festive period as there is something to suit every taste and interest
Wedding and/or engagement – it’s hard to know whether newlyweds want something for their home or honeymoon. Give employees control over how they spend their gift, and you can be confident they’ll be happy with the outcome
One4all Favourites cards are ideal for targeting specific audiences. Each card groups together well-known retailers to make a thoughtful and more personal present that still offers your recipient choice.
What occasions could I give a Choice Gift Card as a trivial benefit?
- Fashion Favourites – in order for employees to purchase new workwear attire ahead of a new business pitch or event
- Beauty & Spa Favourites – these gift cards are ideal for employee wedding presents and could be used to throw a colleague hen-do
- Kids’ Favourites – perfect for expectant parents
- Restaurant Favourites – send employees out to lunch or let them have dinner on you!
Select eGift Codes
Select is our end-to-end platform that allows businesses to reward employees instantly by emailing a code that can be redeemed for a gift card or eGift.
Very few companies realise they can also use Select Codes to fulfil trivial benefits for their employees. As long as you issue a Select Code as a ‘gift’, not a ‘reward’ and the value doesn’t exceed £50, the mechanic can be an effective way to manage trivial benefits for a large workforce.
What occasions could I issue a Select eGift Code as a trivial benefit?
Calendar events – issue a Select Code that allows employees to purchase celebratory gifts for themselves, family and friends ahead of the holiday in question
Welcome gift for new employees – Give a warm welcome to new employees by sending them a Select Code to spend on themselves as they begin their new role
Bank holiday boosters – send Select Codes to employees ahead of Bank Holidays to treat themselves to something for the long weekend
Retailer gift cards and eGifts
An easy way to give out gifts as trivial benefit is to purchase popular retailer gift cards and eGifts in bulk. It certainly makes being organised for occasions, easier and more manageable for HR and finance departments!
Occasions you could bulk buy gift cards and eGifts as trivial benefits:
Birthdays – bulk buying gift cards for employee birthdays makes it simple to send gifts at the right moment
Christmas – Bulk buying your festive employee gifts well in advance of the event means you can decide when is the best time to spend your budget
New staff welcome gifts – it pays to have a stash of “welcome” gift cards in the office (or eGifts on your computer!) as it means you’re always prepared for new arrivals
Team lunches – if you know teams will lunch several times a year it’s worthwhile bulk buying Restaurant Favourites or One4all Gift Cards. It makes trivial benefit admin a lot easier for planned or ad hoc lunches
If you’re interested to find out more about how your business could save money using our gift cards and services for trivial benefits, contact us today using the form on your right.
Ready to talk? Call today on 020 4517 5862.