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Published on 25 January 2016

Draft Finance Bill 2016 – exemption from income tax for trivial benefits provided by employers

LITRG has responded to the HMRC consultation document on draft legislation to introduce a statutory exemption from income tax for trivial benefits in kind provided by employers to employees. The legislation was originally intended to be included in Finance Bill 2015, but it was delayed to allow for further discussion. It will now take effect from 6 April 2016.

The LITRG response welcomes the legislation; the correct structure should mean a reduction in administrative burdens for employers of all sizes; it should also mean that employees do not face a tax charge on items that they do not view as a benefit in kind. LITRG is pleased to note that the exemption is principles-based and brief with only four conditions for the general rule. LITRG thinks that the draft legislation will meet the aim of the proposal to simplify the identification of benefits that should be considered trivial.

One of the conditions is a monetary limit on the cost of each individual benefit – this is currently set at £50, which LITRG considers a reasonable level. LITRG welcomes the inclusion of a provision in the legislation to allow for the limit to be uprated in the future, and calls on HMRC to keep the limit up-to-date to ensure that it provides long-term administrative simplification.

The consultation is available on GOV.UK.

The LITRG submission can be found 


Joanne Walker

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