Trivial benefits — the £50 per benefit and £300 director cap explained?

You've got the rules right. A trivial benefit is tax and NIC-free with no reporting to HMRC, provided each benefit costs £50 or less, isn't cash or a cash voucher, isn't a reward for work or performance, and isn't part of the employee's contract. For ordinary employees there's no annual limit — so multiple £50 gifts through the year are fine.

For directors of 'close' companies (a limited company run by 5 or fewer shareholders, which covers most owner-managed companies), there's an extra cap: no more than £300 of trivial benefits per tax year per director.

Practical points:

1. Keep each gift at £50 or under including VAT and delivery — £51 fails the test entirely.

2. Don't make them contractual or performance-linked; keep them clearly gifts for birthdays, Christmas, weddings and the like.

3. Watch vouchers: cash vouchers don't qualify. A store gift voucher exchangeable only for goods can qualify, but anything near-cash can't.

4. There's no official record-keeping template, but keep a simple log — date, recipient, description, cost — with the receipts. That's what you'll want if HMRC ever asks.

One trap to avoid: don't deliver trivial benefits through a salary sacrifice arrangement — that kills the exemption.