Company No: 09234927 Registered in England and Wales

156 Hanworth Rd, Hampton TW12 3EY, UK

Tel: 020 8234 6184

©2019 by Seed Accounting Solutions Ltd.

  • Rosie Morley

3 things: Giving at Christmas

With Christmas a mere 7 sleeps away you may be wondering about those gifts you have just purchased for your clients and/or your employees and if they are a tax deductible expense. Here Tamsyn gives you the lowdown.

1. Client gifts are an allowable expense, but ONLY when they are a business gift (ie a calendar, diary or pen), contain a conspicuous marketing message (ie they have your branding all over it) AND are under £50. Anything else (food, drink, flowers...) is not a tax deductible expense. As a sole trader, this means it makes no difference whether you put it through your accounts or your personal account. For limited companies, you can put it through the business account, but it won't reduce your Corporation Tax liability.

2. Employee gifts are allowable as long as they are under £50 (*per employee, per year*), are not exchangeable for cash, and are not given in return for anything (ie reaching a target, achieving something, taking on a new client etc). Anything over £50 and the whole lot becomes a benefit in kind (not just the amount over £50)

3. Limited company directors can receive gifts *up to £350* per year. Anything over this amount becomes a benefit in kind.