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The Trivial Benefits In Kind Exemption – More Significant Than The Name Suggests!

Written by Jon Cooper

In almost every tax year, a positive tax reform is introduced that just does not seem to get traction.

In 2015-16, this was the Marriage Allowance about which we have written extensively. This year, it looks to be the Trivial Benefit in Kind exemption.

As the festive season approaches, it is timely to examine this in detail. To qualify as a Trivial Benefit, there are four conditions;

For a ‘Close Company’, the annual amount is capped at £300.00 for the Directors and their families. A Close Company is defined as being privately owned and controlled by five or fewer individual participators. As a result, this covers most small companies and many family businesses.

If the benefit qualifies, it will not be deemed taxable income so no Income Tax nor National Insurance would be due.

There are two important considerations:

As a result, the Trivial Benefit in Kind exemption may be far from trivial, especially for lower paid staff.

The sort of expenses that would be considered a Trivial Benefit include:

There are a couple of points to be aware of:

If you have any questions or would like any further information on the Trivial Benefit in Kind exemption, please email us at tax@cooperfaure.co.uk.

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