PSA1090 - Overview of PAYE Settlement Agreements: Trivial benefits

An employer may ask you to treat a benefit as exempt from tax on the grounds that the cash equivalent (Section 203(1) ITEPA 2003) of the benefit taxable on the employee(s) is so trivial it is not worth pursuing.

For instance a seasonal gift from an employer to their employees at Christmas of a turkey,a box of chocolates or a bottle of wine could be regarded as trivial, regardless of the number of employees involved. There is no requirement for an employer to return these benefits on form P11D.

It follows that where it is considered that such items are trivial benefits they must not be included in a PSA.

For further guidance on the subject of trivial benefits for the 2015-16 tax year and earlier see EIM21860 to EIM21863.

With effect from 6 April 2016, a statutory exemption for trivial benefits came into effect. For tax years 2016-17 onwards see EIM21864 to EIM21872.