Tips on the tax treatment of seasonal promotional gifts

TIME FOR TREATS FOR YOUR TEAM & CLIENTS

The festive season is the perfect time to say thank you to key customers and staff. It is also a great opportunity to help carry the good will forward to more business in the New Year. Experienced Virtual Financial Director Pauline Healey gave us these quick tips on the tax treatment of seasonal promotional gifts can help you.

GIFTS FOR CLIENTS

Promotional gifts that carry a clear advertisement for the business, and cost less than £50 can be business tax allowable. Gifts as a voucher, food, tobacco, drink or alcohol are sadly not tax deductible. Check out an excellent range of popular promotional branded business gifts at Leyland firm https:///www.BusinessGiftUK.com

Non-promotional gifts, or larger value gifts are classed as entertaining and are thus not tax-deductible as an expense.

GIFTS FOR YOUR STAFF AND YOURSELF

For a Limited company, you are able to provide gifts to employees and directors to a maximum value of £50 per gift, inclusive of VAT. These gifts fall under the trivial benefit exemption, so no tax or NI is payable, as long as you do not spend over the £50 gift limit. You have flexibility on what the gift can be, the giving of the gift however cannot be related to a work activity or stated within the contract of employment. It cannot be given as a cash payment but it can be a non-cash gift voucher for shops or spas etc.

Directors are limited to a total of £300 of trivial benefits per year, there is no annual limit for employees.

Go ahead and treat yourself and your team, within these limits!

PAULINE HEALEY

Pauline is based in Lancashire and is a qualified member of the Chartered Institute of Management Accountants

Outsourced FD/CFO to provide clarity & confidence with your finances.

Maximise profit, cash & business value by tapping into vast commercial & strategic financial expertise.

Owner Logical BI Limited https://logicalbi.com/