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Tax relief at Christmas

As Christmas edges closer we take a look at the qualifying tax expenditure your business could take advantage of over the festive season:

Christmas parties
Christmas parties can be held with an exemption from tax and national insurance provided they meet certain conditions, including:

  • Being open to all employees
  • Costing less than £150 per head.

Gifts to customers
 Business gifts are only allowable as a tax deduction if:

  • The total cost of gifts to any customer does not exceed £50 per year and
  • The gift contains a clear advertisement for the business and
  • The gift is not food, drink, tobacco or exchangeable vouchers.

Samples of a product are allowable even if they are food, drink or tobacco.

Gifts to employees
Small items such as a Christmas turkey or standard bottle of wine are considered to be trivial benefits, which can be given as tax-free gifts to your employees. Other gifts to staff are tax allowable, but your employees could be taxed on the value of the gift as a benefit in kind, in which case you would also have to pay Class 1A national insurance on the value of the gifts.

For help and advice on tax relief at Christmas please contact us.