Festive Season Tips

Christmas is an expensive time of year for everyone, not least business people. So it makes sense to ensure you are maximising tax relief available on your extra expenses whilst minimising additional tax payable by those lucky enough to benefit from your seasonal generosity!

Christmas Parties

Expenditure is tax allowable and not taxable on the attendees provided the costs are £150 per head or less, this includes the VAT inclusive cost of the event plus travelling, accommodation etc…. For VAT registered businesses the VAT can be reclaimed to the extent that it relates to directors or employees. As directors are included this can be a nice opportunity for the tax man to contribute towards an enjoyable night out or weekend away for the owner and his or her partner!

Gifts to Staff

Small seasonal gifts such as a turkey, a box of chocolates, a bottle of wine or gift vouchers can be given to staff tax-free. Larger items such as a generous hamper or an all-expenses trip to Barbados should be avoided unless you or your staff are happy to incur a tax bill.

Gifts to Customers

These will only be tax deductible if they include a conspicuous advertisement for the business, are not food, alcohol, tobacco or gift vouchers and cost £50 or less per item. Examples of allowable items could include calendars or pens that advertise the business. Remember for companies that even if the gift is not tax deductible, provided it is for business purposes, then please put it through the company books - it is far better for the company to pay for gifts with no tax relief than for a director to pay the cost out of his taxed income!