Christmas Gifts For Customers


As we’re now approaching the festive period we thought it a good idea to remind everyone about how to treat Christmas gifts for your clients. 

In this post we just focusing on gifts to customers, not gifts to employees.

The general rule is that business gifts do not qualify for tax relief and should be treated as entertaining. However, the good news is, that there are exceptions to the rule:

  1. If the gift is something that  you make or sell in your business,  i.e. a sample, it’s deductible. For all you builders out there that’s unlikely.
  2. As long as the gift costs less than £50 and clearly shows your business name on the gift (not just on the packing) it can be claimed.
  3. If you send a card or make charitable donation it’s tax deductible.

However, if it is alcohol, food, drink or tobacco, I’m afraid the taxman has very righteous views so these are classed as entertaining. This also means you are not allowed to reclaim the VAT.

Remember the cost of carriage counts towards the total cost of the gift. 

SUBCONTRACTORS – You need to remember subcontractors are neither employees or customers so the cost of inviting them to your Christmas party could be considered entertaining.

The whole matter of gifts can get a bit complicated so if you even slightly unsure call us and we’ll be happy to advise.