Are gifts to customers tax deductible?

If you follow a few simple rules, you will be able to get tax relief on your businesses Christmas gifts to clients & suppliers:

1 : The gift can’t be food, drink, tobacco or a token/voucher exchangeable for goods.

2:   The gift itself must carry an advertisement for your business. A business logo would be perfect for this – but make sure the logo is actually on the item itself, so not just on the packaging.

3:   The cost of the gift must not exceed £50 – and the total cost of gifts to the same recipient must not exceed £50 in your accounting period.

Follow these 3 rules and you can treat the cost as an allowable expense for tax purposes.


If you’re VAT registered then any VAT on these gifts is also recoverable, but again it’s subject to the above rules being followed.

Any gifts made to clients / customers that do not meet these rules would be treated as business entertaining and would not be allowable for tax.

These rules apply to sole traders and other unincorporated businesses, as well as to limited companies.

Thanks for reading and be sure to head back to our blog for tax saving tips, and musings about business and finance.

The Dead Simple Accounting Team


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