'Tis the season to spread some holiday cheer, and what better way for UK businesses to do it than with some thoughtful gifts? But, did you know that your generosity can also be a clever move when it comes to tax time?
So what can you do?
Business Gifts for Staff:
When it comes to treating your staff, the taxman can actually cut you some slack. Gifts up to £50 per person (including VAT) are generally considered allowable expenses, meaning you can claim them against tax.
Directors (of companies with 5 or fewer shareholders) – “Trivial Gifts”:
You can claim tax relief on gifts to directors at up to £50 each time (not cash) and as long as they're not exceeding £300 per director in total for the tax year. That means you can splash out on presents like gift card, flowers, wine, meals. Just keep it under that magic £300 mark. Family are also included in this annual limit.
What about the small print:
It must not be cash or a voucher that can be exchanged for cash. Remember not to go over the £50 on each gift or the whole amount becomes taxable! For example, you could buy 6 £50 vouchers over the year but not 3 £100’s or 1 £300! The gifts cannot be work incentives either.
Client Appreciation: Tax Relief for Building Bridges:
Client gifts can be tax-deductible too! Branded corporate gifts, high-quality pens, or a classy bottle of bubbly – you name it. As long as the cost per client doesn't exceed £50 (including VAT), you can claim it against tax. So, go ahead and show your clients some love without worrying about the taxman being a Grinch.
Staff Parties: Making It a Tax-Worthy Bash:
Hosting an staff party? Good news – it's generally a tax-deductible expense. As long as the party doesn't cost more than £150 per head (including VAT), you can claim it against tax. That includes everything from the venue to food. Just remember, moderation is key, and the taxman will on your side.
This holiday season, let's make business gifting a breeze. From staff to directors, family to clients, and those legendary staff parties, there's a tax-friendly way to spread the love. So, go ahead, be generous, and claim those tax perks. Cheers to a stress-free, tax-friendly holiday season!
As always, keep your receipts and ask us if you’re not sure!