🎄 Christmas gifts, promotions and entertaining 🎁

🎉 ✨ ⭐🎉 ✨ ⭐🎉 ✨ ⭐🎉 ✨ ⭐🎉 ✨ ⭐🎉 ✨ ⭐🎉 ✨ ⭐🎉 ✨ ⭐🎉 ✨ ⭐🎉 ✨ 🎉 ✨ ⭐🎉 ✨ ⭐🎉 ✨ ⭐

The festive season is a popular time for discounts, gifts and goodwill gestures. While these can strengthen relationships and boost sales, the tax and VAT treatment is not always straightforward.

🎁 Client gifts and entertaining

• Gifts to clients are generally not tax deductible
• VAT on client entertainment (meals, drinks, events) cannot be reclaimed
• An exception applies to promotional gifts costing £50 or less per recipient per year, provided they carry a clear business advert and are not food, drink or vouchers

🥂 Staff gifts and Christmas parties

• Staff gifts are usually allowable expenses
• Many gifts qualify as trivial benefits if they cost £50 or less
• VAT is generally recoverable
• Staff parties are allowable within HMRC limits

🏷️ Discounts and promotions

• VAT is charged on the discounted price, not the original price
• “Buy one, get one free” offers are taxed on the total amount paid

💷 Gift vouchers

• VAT timing depends on whether the voucher is single-purpose or multi-purpose

Christmas is a great time to reward staff and thank clients but HMRC rules are strict and don’t leave much room for interpretation. A little planning now can prevent disallowed expenses, VAT errors and unwelcome surprises later.

📩 If you’d like help reviewing Christmas spending, promotions or VAT treatment, feel free to get in touch.