Miller & Co

Call Us :  01582 400199
Email: admin@miller-luton.co.uk

  


Business gifts
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.


Luton Office


Call: 01582 400199

5 Imperial Court, Laporte Way 
Luton 
Bedfordshire 
LU4 8FE

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

Harpenden Office


Call: 01582 763447 

2 Victoria Road
Harpenden
Hertfordshire
AL5 4EA

EmailThis email address is being protected from spambots. You need JavaScript enabled to view it.

           

  

 

 

Newsletter Sign up

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

Newsletter Sign up  |  Login