During a recent webinar hosted by HMRC, the host commented that where small benefits, such as food or drink, are provided to employees the trivial exemption would not apply. Their reasoning behind this was that the value over the year would add up to more than £50.
Unfortunately for the host, the exemption does apply to any benefit that is not part of the salary sacrifice arrangement and is not one of the following:
- Cash or vouchers that can be converted to cash,
- Contractual earnings of the employee,
- Recognition for the services performed by the employee as part of their duties.
This means that where the employee is provided with a morning sandwich for not work-related reason, the exemption will apply and be a tax-free benefit. However, should an employee receive the sandwich as they had agreed to come into work early for a work-related task, then the conditions for the exemption are broken.
There is a fear of falling into the trap, whereby the regular provision of the same benefit may become the norm and therefore seen as a reward for services. This would mean the benefit is no longer exempt and will become chargeable as contractual earnings.
