There is a £50 per gift ‘trivial benefits’ allowance. Does the company have to directly purchase the item in question? Or can the employee purchase it at the company's request and then be reimbursed? Also, for directors is the £300 total yearly allowance by tax year, not by company accounting year?
Arthur Weller replies:
I do not have an explicit answer for your first question, but the rules state that the exemption also applies where the trivial benefit is provided on behalf of the employer by a third-party. So, I would guess that if the employee purchases it at the company's request it should be OK. With regard to the £300 yearly allowance for a director, the year in question is the tax year, i.e. 6 April to 5 April.
This question was first printed in Business Tax Insider in October 2019.