Business Tips #3: "Tax-deductable Xmas gifts"

"Food for thought... Orange, anyone?"

Here's a little piece I wrote for a presentation regarding Christmas gifts. I hope it will come in handy for YOU come the festive period:

Christmas is on the way, and you're currently deciding what to give your customers as gifts?

Warning: Gifts of food & Drink, Tobacco and Vouchers receive NO tax-deduction, even if less than £50!

There's also the VAT position to consider. To reclaim the VAT you have been charged on the gifts you have bought, the total value of the gift to EACH client must be no more than £50 (ie: £58.75 VAT inclusive). If you exceed this limit then simply account for VAT as if for a sale.

So, the solution is to have a gift that costs the business no more than £50 per recipient, hence traditional gifts of diaries, pens, calendars etc.

  1. Giving away free samples of your products is 100% deductible, and:
  2. Gifts carrying a conspicuous advert for the business are also tax-deductible, but only up to £50 per recipient.

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