How to make gift giving a little more cost effective

As the giving season is on its way and many have already started present planning. We have answered your festive tax questions to help make gift giving a little more cost effective, as it seems the tax man isn’t as generous as Santa.

Christmas Parties:

Having an annual function any time of year is an allowable tax deduction for a business. Employers can spend up to £150 per head on annual staff events without it being treated as a taxable perk. But be careful, if you spend £151 per person the whole amount becomes a taxable benefit for the employee.

Client Entertaining:

If the event is predominantly for staff, you can invite clients without prejudicing the staff’s tax treatment as set out above.

Staff Gifting:

In previous year, the only gifts that have no tax implications are seasonal gifts such as a turkey, an ordinary bottle of wine or a box of chocolates. But from April 2016 non-cash vouchers can be gifted and employers can now benefit from the exemption.

Trivial benefits legislation came into action April 2016, making room for more benefits for staff and directors. For more information on the different benefits you can claim, contact us on 0845 054 8560.