Unwrapping Christmas tax gifts

Christmas is a time for giving, but many businesses may not be aware that their gifts can be made in a tax-efficient manner, which could make raising festive spirits that little bit cheaper.

While Christmas parties may not be for everyone, HM Revenue & Customs (HMRC) does provide an allowable tax deduction of up to £150 per head per year for events.

This means companies could hold one big Christmas blow out or spread their allowance over the year to improve staff engagement.

Of course, there are restrictions to this allowance. Under the rules, you must invite all employees to the event for it to qualify for the exemption and the cost per head must include VAT and take into consideration the cost of the entire event, including food, drinks and a venue.

If you are feeling generous this year, you could also give gifts to your employees at Christmas or any other special occasions. Thanks to the relief on offer, there will be no taxable employment benefit, providing the gift is trivial, such as a box of chocolates or a bottle of bubbly. However, the costs must not exceed £50 and must not be in the form of cash or a cash voucher.

Finally, you can spread the Christmas cheer even further by providing gifts to your clients. As long as the gift is less than £50 and includes a “prominent” advertisement for your business, then you can receive a tax deduction.

Gifts of food, drink, tobacco or vouchers are unfortunately not allowable, but items such as stationary would fall within the rules.

Loading Quotes...

Latest News

3
Jan
Taxpayers treated unfairly by HMRC, says House of Lords report

The House of Lords Economic Affairs Committee has criticised some of the powers …
Read more…


3
Jan
Taxpayers offered online tool to assess their self-assessment requirement

It should seem obvious whether an individual must submit a self-assessment tax …
Read more…


Register for our newswire

Our regular Newswire mailings are designed to keep you up to date with the latest industry news and events.

Register here

Client Login
Complete our Client
Satisfaction Survey

Autumn Budget 2018

The sun was already edging behind the London skyline by the time Chancellor Philip Hammond...

Read full our summary