Are Gifts to Customers Allowable Against Tax? 🎁

Generally, gifts to business customers are not allowable against your taxable profits.

However, follow this guide, and you can afford to be a little more generous.

HMRC's default position is that business gifts are not allowed as a deduction against profits. The legislation treats gifts in the same way as business entertaining expenditure (see BIM45010).

However, small gifts which carry a conspicuous advertisement for the trader are an allowable expense. Common examples include branded diaries, pens and drinks cups. The advertisement must be on the gift, not just the wrapping.

Unfortunately, expenditure of the following kind of gift is expressly excluded (even if it incorporates your advertisement): Food, drink, tobacco, gift vouchers and gifts exceeding £50 per recipient.

Source material:

• https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim45065

• https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim45070

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