You are taxed on the profit your business makes after deducting the costs it incurs. Some costs, such as business gifts, aren’t normally allowed to be deducted and free from tax, but there are some exceptions.
Small items that feature an obvious advertising message; eg branded pens, mugs and diaries etc. are tax deductible. Tax relief can also be claimed when giving free samples of your products to the public. However, consumable gifts (food, drink or tobacco) aren’t eligible for the tax deduction, and the total cost of all tax free gifts to any one recipient within the tax year, is capped at £50.
If you’re thinking of giving out some business gifts over the festive period and would like some advice, please call us on 01782 279615.