New Forest

29/12/2022

Use of Trivial Benefits to help staff with the cost of living pressures

There are several tax-efficient ways a charity can help its staff to help with the increasing cost of living.

One idea is to offer staff free meals if you have a canteen on site for a period of time; say until Easter. The tax exemption for trivial benefits will allow these to be provided without a tax charge for staff, provided the meals are not a reward for services. Where meals are provided without charge there will be no restriction of the VAT recoverable on any related costs, unlike staff meals where a charge is made.

While it may be necessary to budget for the increased costs it should provide considerable good will and may help with staff retention.

Other ways to utilise the trivial benefits exemption is to provide shop gift vouchers, such as those for local supermarkets, of say £50 per month for a restricted period. These will not be taxable provided they cannot be exchanged for cash and where each voucher awarded is no more than £50.

Should staff need help financially it may be worth considering offering a short term loan, as amounts up to £10,000 will not incur any benefits in kind.

Care will, of course, be needed to ensure the charity can afford it, but this may help those staff with immediate short term needs. If you already offer other benefits to staff, such as a cycle to work scheme, it may be a good time to remind everyone of these.

Finally, staff could be helped to arrange to share their car journeys with each other to save fuel when travelling to and from work.

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