Christmas is the time for giving, but as a business owner you need to be aware of any implications these gifts may have. Buying a gift for a client or a business associate can be a great way to thank them for their custom or the hard work they’ve put in over the year. However, it’s important to know how much you can claim on expenses, and the type of gift you can claim, to avoid receiving repercussions from HMRC. Tax Agility are a team of chartered accountants who can advise you on how to approach the tax rules to give you the best outcome for your business.
Business gifts to clients
HMRC allows you to claim a business gift worth up to £50 to any one person in any one tax year. However, these gifts must be business related (for example a business diary) and must not be food, alcoholic beverages or tobacco. Similarly, the gift must not be vouchers which can be exchanged for food, alcohol or tobacco. The gift must also contain an advertisement for your business, such as the company logo, in order for it to be recognised as a corporate gift.
Also, be aware that if the gift costs more that £50, HMRC will disallow the entire amount, not just the amount over the £50. This will mean that you will not be able to claim for the gift. Stick to these rules, though, and you’ll be able to claim your client business gift on expenses.
Gifts to staff
Christmas gifts to staff members are taxable but you can spend up to £150 per employee on a Christmas party (or other party). The party can be held at any time of the year and can be split into multiple events as long as you don’t spend more than £150 per employee. Similarly to purchasing gifts for clients, if you go over the maximum spend of £150 per employee, the entire amount will be made taxable.
Remember: the online tax return deadline is coming up!
While you’re planning your corporate gift giving, it’s also important to remember that the deadline for completing online tax returns is the 31st of December. This date is fast approaching, but it’s not too late to get the help you need. Tax Agility can complete and send off your tax returns to HMRC on your behalf. By doing all the complicated and time consuming work for you, you can concentrate on more important things like celebrating the holidays with your loved ones and ensuring that your business is ready for a successful New Year.
We also offer a personal tax return service to our three main branches in Richmond, Putney and Wimbledon. With localised offices in these areas, residents can come in and receive tailored assistance from a tax professional.
Contact Tax Agility today
For more information on how we can help you to manage your taxes, or how we can advise you on the tax rules this Christmas season, call us today on 020 8108 0090.