Legal Perks of Running a Business

Sometimes running a business is tough but in this blog I'm going to tell you how to legally take £600 tax free out of your business.

What a wonderful perk.

It's completely legal, but you do have to follow some specific steps.

There are two different ways, the first allows you to have some small treats and the second allows you to have a party, seriously. 

A: Take £300 using the "trivial benefits" allowance

This tax free exemption, allowed by HMRC, is known as the trivial benefits rule. A trivial benefit is not taxed if it costs £50 or less. It can be taken out completely tax free, but you must follow the legal rules, otherwise you may be liable for tax.

1. You can take up to £300 but never in more than £50 increments. Therefore, you can have 6 x £50 benefits.

2. You can't take cash or a cash voucher

3. It can't be a reward for work done or related to performance in any way

4. It can't be a contractual reward

You can take 6 x £50 vouchers for your favourite clothes shop or even your favourite food shop. 

This is a perk for employees, so if you're an employee of your business and you take a director salary, make sure you have your contract. You can get 50% off your director contract using the coupon code "PERK". Click here to grab that before the code expires on 31st December 2025.

B: Spend up to £300 on an annual party.

Okay so this one sounds too good to be true but it isn't. You can legally take £150 per head per employee for an annual party. 

BONUS, you can take a guest and they get the allowance too, which means that if you're the only employee, you can spend £300 taking a guest out for dinner. 

There are some legal requirements which you must follow:

1. It has to be an annual event - it doesn't have to be a Christmas party, it could be a summer party, but it has to happen annually;

2. It has to be open to all employees and held at a specific location;

3. The cost limit of £150 per head is strict, this figure includes VAT, all food, drink and entertainment.

HMRC encourage that you take a partner or family member because if you take a client then it's considered a business expense which is not covered by this exemption.

Both of these options apply to directors of limited companies who are employed by their business. If you run a business and you take your director salary of £12,570 as an employee, you can grab your director employment contract here, which will help you to set out the terms of the employment. Get 50% off your contract when you purchase using the code "PERK" before 31st December 2025.