Henry and Banwell Chartered Accountants > News > General News > Christmas gifts and parties

Christmas gifts and parties

  • Posted by: Michael Winkelmann

‘Tis the season to be jolly and even HMRC will allow a certain amount of staff entertaining and gifts so here’s a bit of advice on what you can claim. Below are some of the rules on what you can claim but please do talk to us as these are often more complex that they seem.

Entertaining staff

You can claim up to £150 per person when entertaining employees. Beware, this is a limit and not an allowance so the total cost must be less than £150. If your event costs £151 per person then you can’t claim anything. Excessive entertaining is not deemed to be wholly and necessarily for the purposes of business.

The definition of employees is generously extended to include former employees and the partners of current and past employees. This can create a family feel to your business by allowing team members to meet and celebrate with each others partners.

Do contact us when planning your event so that we can ensure that it is tax deductible and will not result in a tax charge on your employees which would rather spoil the occasion.

Gifts for staff

These are generally allowable but may result in a tax charge on the employee as a benefit in kind.

You are allowed to provide ‘trivial benefits’ to your staff which are defined as

  • costs £50 or less to provide and
  • isn’t cash or a cash voucher and
  • isn’t a reward for their work or performance or part of their contract

Gifts for customers, etc

Gifts are generally not allowable except in certain circumstances

  • They incorporate a conspicuous advert (on the gift, not just the wrapping) and
  • it is not food, drink, tobacco, tokens or vouchers and
  • a limit of £50 per recipient in each tax period