There are loads of fun things about running a business… and yes, some not-so-fun things (we’ll politely skip those!). But one of the real joys of being the boss is treating your team — saying “thank you”, celebrating milestones, or just surprising them with something nice.

But of course… as soon as tax gets involved, things can feel a bit less joyful.

The good news?
There are plenty of ways to give your team perks without triggering a tax bill or drowning in admin. From tiny gestures to the big Christmas party, here’s a simple, down-to-earth guide to doing it right.

Small Gifts (AKA “Trivial Benefits”)

HMRC actually lets you give small gifts to your team completely tax-free — as long as you follow a few rules.

To count as a “trivial benefit”, the gift must:

• cost £50 or less (including VAT)

• not be cash or a cash voucher

• not be a reward for work performed

• not be something written into a contract

If you’re a company director, you can treat yourself too — up to £300 a year, as long as each individual gift stays under the £50 limit. For employees, there’s no limit to how many trivial benefits they can receive during the year.

Easy gift ideas:
Wine, chocolates, flowers, non-cash gift cards, cinema vouchers, coffee shop vouchers, birthday treats, puzzles/games, off-the-shelf hampers.

Team Lunches

Team lunches can be tax-deductible, but only when they meet HMRC’s “staff entertaining” requirements.

Here’s what counts:

• It must be occasional, not a weekly habit.

• It must be open to all employees, not just directors or chosen favourites.

• You need to keep a record of who attended and why it took place.

If it’s only directors attending — or you’re a one-person company — HMRC will treat it as personal spending, not a business expense.

If clients or suppliers join you? That becomes client entertaining, which means no Corporation Tax deduction and no VAT reclaim. Fun, yes. Tax-efficient, sadly not.

Staff Parties

Yes — you can throw a tax-efficient Christmas party that won’t give HMRC heart palpitations.

To qualify:

• The event must be annual (e.g., Christmas party, summer BBQ)

• It must be open to all staff

• The total cost must be £150 per person or less (including food, drinks, transport, accommodation — everything)

The sneaky bit:
Go over £150 per head by even 1p, and the whole amount becomes taxable. Not just the extra.

Also, just like lunches, a “party” for directors only doesn’t count.

Holiday, Christmas or Birthday Gifts

There isn’t a special HMRC rule for seasonal or birthday gifts — they simply fall under the trivial benefits rules above.

So if you want to treat the team at Christmas, stick to the £50-per-gift rule, and you’re safe.

Office Comfort & Home-Working Perks

If you want your team to be comfortable and productive, HMRC is usually fine with equipment that’s needed for work.

Generally allowed:

• Chairs, desks, monitor stands

• Computer accessories, keyboards, webcams

• Headsets, second screens

• Lamps or organisers if they’re clearly for work

But keep in mind:

• The items must be necessary for the job

• They must be used for work, not personal use

• Keep receipts and records

• Decorative items or things that look like personal treats may not pass the test

Wellness Perks

Employee wellbeing is huge — but not always straightforward from a tax perspective.

What’s normally allowed:

• Eye tests, if your employees use screens

• Annual health checks, as long as they’re through a recognised provider

What’s usually taxable:

• Gym memberships (unless it’s a gym in your own business premises)

• Wellbeing allowances

• Private therapy

• Personal trainers

• Most private medical insurance

They’re still great benefits — just expect them to be treated as benefits-in-kind.

The Bottom Line

You absolutely can treat your team, boost morale, and build a great workplace — without creating a nasty tax surprise.

A little planning goes a long way.
Stick to the HMRC rules, keep good records, and when in doubt, ask your accountant (hi 👋).

If you want help setting up tax-efficient perks or making sure you’re staying compliant, I’m always here to help.