Buying gifts for clients or associates can be a great way to express gratitude for their business or their hard work. However, to avoid HRMC repercussions, it’s important to know how much you can claim on expenses and the types of gifts you can claim.
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/work 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
Gifts to staff members are taxable, but you can only spend up to £150 per employee on a company party. By HMRC’s standards, the party can be held at any time of the year, and businesses may split the party into multiple, separate events as long as the expense per employee does not exceed £150. Similar 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!
If you have any concerns about the tax implications of corporate gift giving, get in touch with our small business accountants today. It’s never too early or too late to get the help you need to navigate the claims process. 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 growing your business.
We also offer a personal tax return service at 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 manage your taxes, call us today on 020 8108 0090.