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Planning Christmas 2025 What You Need to Know About Trivial Benefits
25 September 2025
Accounting & Compliance, Reducing Tax
As the year progresses, many businesses start looking ahead to the festive season, from Christmas parties to staff and client gifts.
With some careful planning, you can make the most of your budget while staying tax-efficient.
What Are Trivial Benefits?
Trivial benefits are small perks employers can provide tax-free to employees or directors.
Introduced in April 2016, the rules were designed to simplify tax reporting for minor, non-cash gifts while letting your team enjoy them without extra tax liability.
Rules for Tax-Free Trivial Benefits
To qualify, benefits must meet these criteria:
- Not be cash or a cash voucher (shop gift vouchers are allowed if they cannot be exchanged for cash).
- Cost no more than £50 per person on average.
- Not form part of a salary sacrifice or contractual obligation.
- Not be given as a reward for specific services.
- Annual limit of £300 applies for directors or office holders of a close company and their family or household members.
Close company: Typically one owned by five or fewer shareholders.
Example:
A director receives a £40 wine bottle for her birthday and a £45 Christmas gift — leaving £215 of her £300 allowance.
A small summer event costing £30 per person would reduce the remaining limit to £185.
Key Considerations
- Exceeding £50 per item makes the entire benefit taxable.
- Gifts linked to performance are taxable, even if they are under £50.
- Casual perks, such as team lunches or coffee treats, generally qualify as trivial benefits if they’re not part of a structured or performance-linked event.
Festive Gifts for Staff and Clients
Staff Gifts:
- Small presents like chocolates, turkeys, bottles of wine, or vouchers can be tax-free under trivial benefits rules (max £50 per employee).
Client Gifts:
- Deductible if:
- Clearly branded with your business
- Not food, alcohol, tobacco, or gift vouchers
- Cost £50 or less
- Examples: Branded calendars, pens, or notebooks.
Even if client gifts aren’t deductible, it’s usually more tax-efficient for the company to cover the cost rather than directors paying personally after tax.
Christmas Parties and Annual Events
- Annual staff events, including Christmas parties, are tax-free if the cost does not exceed £150 per person, including VAT.
- Total cost includes travel, accommodation, and catering.
- The rule applies to any single annual staff event — not just Christmas parties.
- If you hold multiple events and total costs exceed £150 per person, only one event qualifies as tax-free.
VAT-registered companies can reclaim VAT on staff-related costs.
Charitable Giving
If you’re thinking of charitable donations this festive season, planning them carefully can make your giving more tax-efficient.
(Read our related blog: Tax-Efficient Charitable Giving at Christmas)
Preparing for Christmas 2025
To make the most of tax-free gifts and events this year:
- Review the trivial benefits cap for each director or employee.
- Plan staff parties and gift lists within the £150/£50 limits.
- Check which gifts are tax-deductible for clients and adjust accordingly.
Get in touch
If you have any questions in relation to the content of this blog please get in touch with our tax manager Christie Inns.
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Related blogs
Take a look at our other blogs on the topic of tax implications:
Twelve days of Christmas: What are the tax implications of all those lovely gifts?
Tax Efficient Charitable Giving at Christmas
The content in this blog is correct as at 25th September 2025. See terms and conditions.
