De minimis — often misspelt "di minimus" — is Latin for "the law does not concern itself with trifles", and UK tax is full of the thresholds that put the principle into numbers: the lines below which VAT ignores your exempt activity, benefits escape tax, and whole compliance regimes switch off. Knowing where the lines sit is free money and avoided admin; drifting across one unknowingly is how tidy businesses acquire messy problems. Here are the de minimis limits that matter most in practice — and the two that are changing.
The VAT partial exemption de minimis: the big one
The most valuable de minimis in the system belongs to partially exempt businesses. Normally, input VAT attributable to exempt activities is irrecoverable — but if your exempt input tax is no more than £625 a month on average (£7,500 a year) and no more than half your total input tax, the de minimis rule lets you recover all of it. A trading company with a little rental income, a firm with some exempt commission — businesses like these recover thousands a year purely by being under the line, and lose it entirely the year they drift over. The rule is tested provisionally in-year and definitively in the annual adjustment, which makes monitoring it a standing item wherever exempt income exists: near the boundary, the timing of costs and the structuring of exempt sidelines are genuine planning levers. (The mechanics live alongside the partial exemption methods our VAT specialists run.)
The employment and benefits lines
Payroll carries its own family of trifles, each with sharp edges: trivial benefits at £50 or less per benefit (not cash, not a reward, not contractual — with a £300 annual cap for close-company directors), the exemption that makes staff gestures tax-free until someone puts £55 on the card; the £100 parental settlement rule, under which a minor child's investment income from a parent's gifts is taxed on the parent once it passes £100 — a cliff, not an allowance, as our trusts guide explains; and the £10,000 beneficial loan threshold below which an employee's (or director's) interest-free loan generates no benefit charge — and above which the whole loan does, the trap that catches drifting directors' loan accounts. Adjacent and often confused: the £1,000 trading and property allowances for individuals — genuine de minimis exemptions for small side income, and the reason a car-boot habit is not a tax problem until it becomes a business.
The corporate switches
Several whole regimes turn on de minimis gates: the corporate interest restriction ignores groups with net UK interest under £2 million a year — the single most consequential threshold most growing groups have never checked; the CFC rules' low-profits exemption clears foreign subsidiaries under £500,000 of profit; and trusts enjoy their £500 income de minimis and £1,500 CGT exemption, both shared across a settlor's settlements. The pattern to respect: these are mostly cliff-edges, not allowances — cross the line and the regime applies to the whole amount, not the excess — so "we're roughly under it" is a monitoring obligation, not an answer.
The two that are changing
Two long-standing de minimis lines are on the move. The £135 customs relief on low-value imports — the rule that let small consignments enter duty-free, and the foundation of the overseas-parcel retail model — is being abolished: announced at the last Budget, draft legislation published in mid-2026, duty applying to low-value imports by March 2029 at the latest (the VAT side — point-of-sale VAT on ≤£135 consignments — continues for now, with changes floated but unconfirmed). Importers and marketplace sellers built on the relief should model the post-relief landed cost this year, not in 2029. And EMI's notification de minimis-style easements aside, the broader lesson of recent years — MDR, the FHL regime, the £100k EA cap — is that thresholds and reliefs move at Budget speed, which is precisely why this page carries dates.
Managing the trifles
The practical routine: list which de minimis limits your business actually relies on (most rely on two or three without knowing), assign each a number that gets checked at year-end — average monthly exempt input tax, net interest expense, benefit values — and treat approaching a line as a planning trigger while options still exist on both sides of it. Acumon builds exactly this into compliance cycles across VAT, corporation tax and employment tax — because the law may not concern itself with trifles, but HMRC's systems concern themselves greatly with businesses that miscounted them.