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Christmas Tips for 2023

Annual Christmas/Staff Party

As you may be aware, there is an exempt benefit that can be paid by your company without any negative personal tax consequences, providing the cost doesn’t exceed £150 (inc VAT) per head. What this means in practice is you can have a nice meal out with your family, and the meal can be paid for by the company (receiving CT relief). You, as an individual, will not suffer any personal tax. Great news!

Small print: it is up to £150 per head, per tax year, and you can only invite people from your household. It’s worth mentioning that if you were to go above the £150/head, the whole amount becomes taxable. So £150 (including travel/food/drinks) is very much your limit without suffering any tax.

Client Gifts

If any of your clients are worthy of a gift, please note that none of what you might consider typical gifts are tax allowable business expenses (chocolates, wine, event tickets etc). However, if you want to gift these types of items, it will still make sense to do so via your company rather than from personal funds. Just ensure you explain as “business entertaining”, meaning no corporation tax relief is claimed.

You can, however, get corporation tax relief on gifts to clients provided the gifts meet all the criteria below: 
– cost no more than £50 per client per year, 
– not be good, drink, tobacco, or vouchers, 
– have an advert for your company (eg be branded with your company name/logo)

Common examples would be branded mugs/pens/T-shirts. By all means get creative. Just ensure you meet the criteria above if you want to get corporation tax relief.

Trivial Benefits

If you don’t have any employees (or don’t like your clients!) why don’t you use the tip below to treat yourself?

Several years ago, a new exempt benefit was introduced which allows the company to treat an employee of the business with a small (up to £50) gift/gift card. As with staff entertainment, the present’s value must be no more than £50. Otherwise the whole amount becomes a taxable benefit in kind.

Small print: a director is not allowed to have more than 6 gifts/gift card per tax year without triggering personal tax on those gifts.

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