Trivial benefits in kind (BiK) – Relief from 6 April 2016

Legislation will be introduced in Finance Bill 2016 to amend Chapter 11 of Part 4 of ITEPA to provide a statutory definition of a trivial BiK. The exemption sets out a number of conditions that must be met for a BiK to be exempt, including an upper limit per individual BiK of £50.

Qualifying trivial BiKs provided to directors and other office holders of close companies will be subject to an annual cap of £300. Where the director’s or other office holder’s family or household member is also an employee of the company, they will be subject to a £300 cap in their own right.

This is a welcome relaxation in an area which has often been a bone of contention and also caused a lot of administration for very little return to the Exchequer. In the past it has been necessary to agree with HMRC what was a trivial benefit although HMRC did give some examples such as bottle of wine or a turkey at Christmas or a bunch of flowers.