Can I buy my clients a gift?

 

This question always comes up at this time of year, so it’s worth a quick blog post.  (and it will be quick too, because the rules are really very simple..)

 

HMRC will allow you to give a business gift worth up to £50 to any one person, in any one tax year.  Added to which, the gift must be a business gift.  For example, a diary, pen, notebook etc.  And it must carry conspicuous branding for your business.

 

It must not be food, alcoholic, or a voucher which could be exchangeable for food, drink, or tobacco.

 

The bad news, is that if the gift costs more than £50, HMRC will disallow the whole lot, not just the ‘over £50’ element.

If the gift does not carry a conspicuous advertisment or branding for your business, there’s every chance that HMRC will class this as entertainment, which of course, is not allowable.

So, to recap:

A branded gift, not tobacco, food, or alcohol, and under £50 in total for the year.  Simples!

 

You’re lucky enough to employ staff?

HMRC will allow you to spend £150 per employee on a party. (I’m thinking not just Christmas, but summer BBQ etc here).  This can be split between more than one event, but, as stated above, not be above the £150 limit, or the whole lot is disallowable.  Very much a scorched earth policy at work here.

A quick note though:

If partners are also attending the party, the expenditure is allowable for tax, under the condition that the total figure, inclusive of guests, still amounts to no more than £150 per attending employee.