As we are now into the swing of the Christmas festivities we thought we’d put a blog together on what Christmas gifts are tax deductible. We know that you will probably want to show your appreciation to your staff for their hard work and to your clients for their loyalty. 

However, if you want to purchase gifts and make sure that they are allowable expenses there are some things you need to know.

There is a limit on how much you can spend on each person whether that be your staff members or your clients. The limit set by HMRC is £50 each. Now here comes the most important part. You cannot overspend! Any gift which exceeds the value of £50 will not be tax deductible at all, not even just the first £50. HMRC have set this limit so that gifts cannot be seen to be an act of bribery, so keep your spending below £50 for each person. 

When purchasing gifts for your employees you can buy things such as a bottle of wine, a box of chocolates, a voucher, but cash is not acceptable. The great thing about it is, if you’re on the payroll you can treat yourself too!

When selecting gifts for clients though you have to ensure that the items are branded with your logo in order for them to be tax deductible. They cannot be in the form of alcohol, tobacco, food or vouchers. There are some great ways to incorporate your logo on various items. For example, if they like playing golf as I do, why not buy them some branded golf balls? It doesn’t just have to be branded stationery, although a nice planner ready for the new year would be welcomed I am sure!

So please take into consideration the limitations set by HMRC whilst purchasing you gifts this year. Happy shopping!

If you're in doubt then please get in touch with us.