Tel: 01736 795753
This email address is being protected from spambots. You need JavaScript enabled to view it.

Business gifts

Source: HM Revenue & Customs | | 18/11/2021

The rules for deciding whether a gift given in the course of business is deductible are complex. The rules for business gifts generally follow those for business entertaining expenditure. This means that HMRC take the view that in general business gifts are not an allowable deduction from profit for tax purposes.

However, there are exceptions to this rule. Where the following exceptions apply, the expenses incurred in providing the gift are deductible from trading profits. The exceptions are where:

  • the gift is of an item which it is the trader’s trade to provide and it is given away in the ordinary course of the trade to advertise to the public
  • the gift incorporates a conspicuous advertisement for the trader, although there are exclusions relating to the type of gift and the total amount per person
  • the gift is provided to the employees of the trader so long as this is not incidental to gifts being provided to others
  • the gift is given to charity or other specific bodies.

HMRC is clear that in some instances, something that appears to be a gift may actually be a part of a sale to a customer. HMRC’s manuals provide the example of a bunch of flowers presented to a customer who has just purchased a new car would effectively have been paid for by the customer - it is a part of the cost of the car. Similarly, gifts offered to customers who purchase a certain level of goods are really discounts on sale and not business gifts. Gifts of this nature are not disallowed by the legislation.



Search Archive


Latest News

Leaving gifts to charity in your Will
20/01/2022 - More...
The government introduced new rules to encourage charitable giving on death in 2012. The rule which

Tax relief for working from home
20/01/2022 - More...
If you are an employee working from home, you may be able to claim tax relief for some of the bills

Replacement of domestic items in let property
20/01/2022 - More...
The replacement of domestic items relief has been in place since April 2016. The relief allows

Search

Our Address

Greenwood Wilson
The Old School
The Stennack
St Ives
Cornwall
TR26 1QU

Contact Us

tel: 01736 795753
fax: 01736 798642
This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Mobile Apps

To download our APP search for Informanagement and enter the code Greenwood.

 

Newsletter

With our newsletter, you automatically receive our latest news by e-mail and get access to the archive including advanced search options!

» Sign up for the Newsletter
» Login