How To Be A Generous Boss
It’s Joan in the accounts department’s birthday, you had planned to get her a lovely bouquet of flowers (she does work very hard trying to keep track of all your many receipts), but your accountant has pointed out that HMRC don’t allow you to be a kind and considerate boss...not without tax consequences for you and your staff...
...well not any longer. It’s not often HMRC give us good news, so don’t forget the generous (for HMRC) exemption which has removed the liability to PAYE for low value benefits in kind.
To qualify as a ‘trivial BiK’ all of the following conditions must be met:
- the BiK must not be cash or a cash-voucher;
- the BiK must cost £50 or less;
- the BiK must not be provided as part of a salary sacrifice or other contractual arrangement; and
- the BiK must not be provided in recognition of services performed by the employee as part of their employment, or in anticipation of such services.
Surprisingly, there is no limit to the number of trivial BiKs that can be provided to an employee in a tax year where all conditions are met.
Even more surprisingly, the exemption is also available to director/shareholders, however, there is an annual cap of £300 in these circumstances (including a member of the family or household of a director or other office-holder of the close company).
So, remember, still no vouchers but you can give flowers, small gifts, hampers etc as leaving, birthday or new baby type gifts – you’ll soon be the generous boss you always imagined yourself to be...