The World Cup and making the most of trivial benefits rules

The World Cup is now in full swing, and with England performing well (so far), you may have started wondering how to enjoy upcoming matches with your staff. Especially with the increasingly likely possibility that England find themselves playing a last-32 fixture with a 5pm kick-off time on a weekday!

Before getting too carried away, leaving aside the sporting uncertainty for a moment, there are some tax rules you should be aware of first.

Generally, the cost to your business of entertaining staff will be tax deductible for your business. You can deduct the cost from your profits before HMRC taxes those profits.

What are taxable benefits?

Many social events for staff don’t trigger a taxable benefit as they are annual events under £150 per head, such us a Christmas party. If you already hold a regular summer party, you could give it a World Cup theme.

Outside of this, it is worth remembering that the World Cup is only once every four years and may therefore not qualify for the same exemption. If though the cost is less than £50 each (including VAT) then your event could qualify as a trivial benefit.

What are Trivial Benefits?

Trivial benefits can apply in other circumstances as well. To qualify, all of the following must apply:

• It cost the business £50 or less to provide and is neither cash nor a cash voucher
• It is not a performance or service related reward
• It is not part of an employee’s contract with the employer

If you don’t meet the trivial benefit conditions, you create a taxable benefit on the full amount. You must then include the benefit on your staff’s P11D forms.

Alternatively, as an employer, you can enter into a PAYE Settlement Agreement with HMRC. This means you pay the tax on behalf of your employees.

Final thoughts

If England reach the final on Sunday 19 July, employers may wish to consider allowing their employees an additional day off on the Monday to rest any sore heads. That is of course unless we are all given a bank holiday to celebrate. Presumably this will not be relevant to employers and employees in Scotland!

If you have any questions on the taxable benefit position of your plans, or want to discuss the World Cup itself, please feel free to get in touch with your local Perrys branch.