What counts as a business gift?
Business gifts include all presents and gifts you give to customers, partners or collaborators to show your appreciation and strengthen business relationships. These can range from small tokens such as pens and notepads to more luxurious gifts such as bottles of wine or gift vouchers.
Business gifts (and VAT) as a deductible business expense
The cost of business gifts can be considered a professional expense and therefore deducted from your taxes.
The deductibility of VAT depends on the type of business gift. Here are the specific rules:
- Business gifts under £50 (excluding VAT) per recipient: For gifts that cost less than £50 excl. VAT, you can reclaim the VAT. These gifts must be necessary and relevant to your business activities.
- Business gifts over £50 (excluding VAT) per recipient or alcoholic gifts: For gifts that cost more than £50 excluding VAT, or for alcoholic gifts, you cannot reclaim the VAT. These costs can still be deducted as business expenses, but without VAT reclaim.
It is important to remember that only gifts that are actually used for professional purposes can be deducted as business expenses. Personal expenses are not eligible. You can easily keep a summary of your expenses via the Dexxter accounting platform.
Check out our blog article on business gifts for additional tips!
