In addition, qualifying ‘trivial’ BIKs provided to directors or other office holders of close companies, or to members of their families or households, will be subject to an annual cap of £300.

The measure will come into force after 6 April 2016.

Legislation will be introduced in Finance Bill 2016 to provide a statutory exemption from tax for qualifying trivial benefits in kind costing £50 or less.

Employers will no longer be required to report such benefits on either form P11D or via Pay As You Earn Settlement Agreements (PSAs) at the year end.

There will be a corresponding disregard for those trivial benefits in kind that attract Class 1 national insurance contributions (NICs). Draft secondary legislation for the NICs changes was published for consultation on 9 December 2015.

The legislation will also enable amendments to be made by Statutory Instrument to the £50 upper limit per individual benefit, the £300 annual monetary cap for directors and other office holders of close companies and members of their families and households who are also employees of the company, and the conditions of the exemption.

CCH tax writer Meg Wilson said: 'There is no doubt that if HMRC spot what they consider to be abuse of the exemption we can expect further restrictions to be introduced. It is to be hoped that HMRC will review the £50 cap regularly so that the exemption continues to be worthwhile.'

Changes will be made to the 2007 Employer-Financed Retirement Benefits (Excluded Benefits for Tax Purposes) Regulations to apply the exemption to former employees and the annual cap to trivial benefits in kind provided to former directors and office holders and members of their families and households. Draft secondary legislation for these changes was published for consultation on 9 December 2015.

This was first announced at Autumn Statement 2014 and postponed from Finance Act 2015 due to the accelerated parliamentary process in March 2015.

Further details are available here