The range of benefits that can be provided tax-free by an employer is relatively limited, but there are several common exemptions that apply where certain conditions are met.
Meals provided in a staff canteen can be exempt where they are offered to all employees on a reasonable scale and are not
Employers looking to provide staff with small gifts or seasonal tokens of appreciation should remember the rules for tax-free trivial benefits.
A benefit can qualify as a trivial benefit where all of the following conditions are met:
the benefit costs £50 or less;
it is not cash or a cash
Employees who receive fuel from their employer for private use in a company car can avoid paying the car fuel benefit charge by reimbursing the full cost of the private fuel. This process, known as "making good," requires the employee to repay the employer for private fuel no later than 6
The rules on claiming tax relief for working from home are changing for the new 2026-27 tax year. In most cases, employees will no longer be able to claim relief for homeworking, although claims can still be made for the previous four tax years. The removal of the tax relief was announced in the
While company cars often come with tax implications, there are specific situations where the associated benefits may be exempt. There are circumstances where it can be possible to offer employees car benefits that are exempt from tax.
Exempt expenses and benefits include the
The trivial benefits legislation provides a simple and practical tax exemption that allows employers to give small non-cash benefits to employees without triggering tax or National Insurance charges.
To qualify as a trivial benefit, the cost to the employer must not exceed £50 per item. The benefit
Employees with company cars may be paying unnecessary tax on private fuel, when reimbursing the cost of private fuel in full can often remove the car fuel benefit charge altogether.
Where an employee is provided with a company car and fuel for private use, the default position is that the employee
As an employee, you pay tax on certain company benefits, such as cars, accommodation, and loans. Your employer calculates the tax you owe and deducts it through Pay As You Earn (PAYE). The amount of tax depends on the type and value of the benefit.
Some company benefits are tax-free, including
There is a trivial benefit-in-kind (BiK) exemption that applies to small, non-cash gifts (such as a bottle of wine or a bouquet of flowers) that are occasionally given to employees.
This exemption enables employers to offer modest, tax-efficient rewards while simplifying the administration of BiKs.
The tax you pay on the use of a company car depends largely on its CO2 emissions, so choosing a lower emission or electric vehicle can make a significant difference to your overall tax cost.
The benefits in kind (BIK) tax on company cars can be quite significant, with taxable rates ranging from 3%