Help needed with setting up account for "trivial gifts"

Just been ploughing through the information from HMRC. It would seem that a Ltd is able to give “trivial gifts” to employees <£50 up to a maximum of £300 per tax year.

I would like to set up an account to do this in my chart of accounts. Would be really grateful to know how to do this.

Thanks

Hi @Harvie

That’s correct, the cost of providing the benefit does not exceed £50 (or the average cost per employee if a benefit is provided to a group of employees and it is impracticable to work out the exact cost per person).

Where the employer is a close company and the benefit is provided to an individual who is a director or other office holder of the company (or a member of their family or household) the exemption is capped at a total cost of £300 in the tax year.

Tag to 8205: Refreshments / Staff Welfare
or 6202: Gifts and Samples or create a custom nominal.

You would however just need to ensure that the balance there doesn’t exceed the HMRC limit in an accounting period

Thanks for the information.

You mention the exemption of £300/director in the tax year. My accounting period runs from Dec to Dec. Does that mean £300 up until April 4 (for tax year 2017-2018) and then a further £300 (for tax year 2018-2019) in my accounting period?

HMRC states:

You can’t receive trivial benefits worth more than £300 in a tax year if you’re the director of a ‘close’ company.

“Tax year”. That would imply that it’s April - March tax year rather than your accounting year. However, I would double check with an accountant or HMRC themselves to be sure.