March 2016 Updates: National Living Wage & Tax on Trivial Benefits

National Living Wage


From 1 April 2016 workers aged 25 and over will be entitled to a new minimum pay rate of £7.20 per hour, called the National Living Wage (NLW).
Employers need to find out about the changes and what needs to be done before 1 April 2016 to avoid penalties.

Tax on trivial benefits (as per HMRC website)

You don’t have to pay tax on a benefit for your employee if all of the following apply:

  • it cost you £50 or less to provide
  • it isn’t cash or a cash voucher
  • it isn’t a reward for their work or performance
  • it isn’t in the terms of their contract

This is known as a ‘trivial benefit’. You don’t need to pay tax or National Insurance or let HM Revenue and Customs (HMRC) know.

You have to pay tax on any benefits that don’t meet all these criteria.