It’s that time of year again – gift giving, partying and family gatherings. We all know it’s a time for joy and generosity, but did you know that it’s also a great opportunity to take advantage of some tax efficiencies? Here, we break down the different ways you can have fun while minimising your tax burden.
Festive feasts and tax-friendly treats
Want to treat yourself and your company to a festive meal? You can spend up to £150 per head and enjoy a delicious meal with colleagues or with people from your household. Yes, it’s true, the £150 can also be spent on your nearest and dearest. The important point to note is that if you exceed the £150 per head limit, the whole amount becomes taxable.
Gift giving
Thinking about showing your appreciation to clients with a little something extra? Consider your options carefully. While gifts like chocolates and wine might seem like thoughtful gestures, they’re not tax-deductible. To maximize your tax benefits, opt for branded gifts like mugs, pens, or T-shirts that cost no more than £50 per client per year. This way, you can show your appreciation and show off your brand.
A little something for yourself
And let’s not forget you. If you don’t have any employees, the trivial benefits exemption allows you to treat yourself to a small gift or gift card, up to £50 per gift. It’s a great way to reward yourself for a year of hard work. Just remember, a director is not allowed to have more than 6 gifts/gift cards per tax year without triggering personal tax on those gifts.
Giving back, tax-efficiently
Want to share the love this holiday season with a gift to charity? Gifting via your limited company is a fantastic way to make a difference and reduce your company tax bill. Just make sure the charity is on the official registry of charities to ensure your donation is tax-deductible.
If you’re unsure about whether your gift is within the rules or have any other tax or accountancy-related questions, we’re here to help. Just reach out with your questions.
