December may be the time for treating your employees and clients but ensure you understand the tax implications before you do.
Gifts to clients and customers
You can give a sample, or something that it part of your trade or something that advertises your business (e.g. has your logo on it) provided it is not food, drink or tobacco and it will be tax deductible. This also applies to other gifts as long as they do not exceed £50 in total.
Gifts to employees
Gifts to employees are always tax deductible to the employer but may be treated as a taxable benefit to the employee.
A trivial gift, such as a bottle of wine, a box of chocolates or a turkey will not incur any tax on the employee. A larger gift, such as a Christmas hamper, a case of wine or vouchers will.
Christmas Party
Entertaining for employees is an allowable expense for the business and you can reclaim imput VAT on the costs.
For an event for employees so long as the total cost (including VAT, food, drink, travel and accommodation) is less than £150 this will not be classed as a taxable benefit for your employees. The event must be open to all staff and other staff events (including this one) throughout the year must have totalled less than £150 a head.
Most important of all, enjoy it!
Wishing you all the best for the festive season from jla accounting!
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