Christmas gifts

To avoid receiving the lump of coal that is an unexpected tax bill, you should consider the following when giving gifts to employees or customers. 

Gifts to employees

Usually anything you give to employees will be a taxable benefit in kind of their employment. However, there is an exemption for trivial benefits that would allow you to still give your staff Christmas gifts. To qualify as trivial, the gift must meet the following conditions:

It must not be cash or a cash voucher

It must cost less than £50 

It must not be something they are entitled to under their employment contract or a reward for specific work they have done or will do in the future

Gifts to customers

Often pleasant things given to customers will be classed as entertainment, which is not a deductible expense for tax purposes. Gifts to customers can be tax-deductible if you remember the following rules:

A gift cannot be food, alcohol or tobacco, unless they are samples of goods the business sells

They must cost less than £50

A prominent advertisement for the business must be included with the gift 

If you need assistance with tax and accounting matters beyond gift giving, please call us on 01892 807001.