Sending a gift to a client, or to a member of your team, is a lovely touch to improving relationships, but what are the regulations in place around expensing them?Well, it is a bit different depending on who you are sending the gift to! Let’s start with:
For employees, you have a set amount each year that you can stay within for each individual, this covers all the gifts you can share before you need to think about “benefits in kind” which are taxable, and something we will cover in another article!By law, abiding by the Trivial Benefits legislation, you must stay under £300 per individual for each year, with a maximum allowance for each gift being £50 (so 6 per year total are permitted). There are restrictions to this gifting:
Within the Trivial Benefits regulation, you do not need to add these gift items to their P11D and do not need to pay any tax or national insurance whether you are the employer or the employee.Now we come to:
This is where it does get a little more tricky. HMRC does allow companies to give a business gift, worth up to £50, to any one person in any one tax year.As you can see, they have rather quickly noted it must be a business gift. This must not be food, alcohol, drink, or tobacco, or vouchers which are exchangeable for these items. The gift must also carry a conspicuous advertisement for your company in order to not be classified as entertainment expenses, as these are not allowed.This amount of £50 can be per individual in your client’s company, so if you want to go the extra mile and send a thank you gift to your direct client’s Personal Assistant, they would be able to have a gift expense of up to £50 separate to the gift you send your client. Remember, these gifts must carry a conspicuous advertisement of your company to be kept within this regulation. So branded notebooks or diaries are a great option, as long as they stay under £50 each, otherwise, the entire item will be taxable.Gifts are a great way to keep in touch with your clients and team, and if you stick within these regulations, it also helps you to keep the HMRC happy, and your accountant happy too.
