Businesses gifting clients around Christmas, Easter or other celebrated holidays is common, but what are the tax implications of gifting to your clients or customers?
Gifting to clients or customers
Products like a branded pen or water bottle may be tax-deductible, but the gift must incorporate an advertisement for the business, meaning your logo or business name must be somewhere on the product.
However, if a gift contains food, drink, tobacco, or any voucher that can be exchanged for goods, even if the business name or logo is featured, it is not tax-deductible.
A company can get a tax deduction if it gives away products as free samples or promotional gifts during regular business activities. For example: if a bakery were to hand out free biscuits at a local event to promote its products, this could be claimed as it is part of their regular business marketing.
It is worth noting that donations to charities in place of gifts would be tax deductible.
Gifting to employees
In addition to the allowance for staff entertainment, which covers one or two staff parties each year, employers can also provide small, tax-free gifts to employees under HMRC’s ‘Trivial Benefits’ rules.
If all the points below apply, you wouldn’t have to pay tax on a benefit for your employee:
Why are we mentioning this now?
Well, with the tax year coming to an end, you may be thinking of putting together your budget for the coming year, plus with Easter coming up, summer upon us, and (we’re sorry to mention it now) Christmas following yet again, now is a great time to start thinking about and planning for how you might want to share the love with your network.
‘Giveaways’: a different way of gifting
It’s becoming a bit of a tradition that, each year, we host a giveaway for our clients and friends, specifically at Christmas. Last year, Christmas 2024, we decided that not only did we want to solely gift from local brands and businesses, but that we would make the giveaway exclusive to our clients.
So, why a giveaway?
A giveaway is a fun and interactive way for clients to engage with us and for us to engage with clients. And, it allows us to keep it fair and for all clients
Plus, it takes the hassle out of ‘entering’. Christmas is a busy time for many, so instead of emails and social posts continuously reminding our busy clients to enter, we did it all for them and entered them automatically. Instead, an announcement was shared on our website, email, and socials so our clients could simply look forward to the upcoming winner’s announcements.
What did we gift?
We made it a key aspect of this giveaway that we supported local businesses, and only ordered from them, our fantastic clients included!
We curated a collection of thoughtful, unique gifts that not only reflected the exciting time of year, and the year ahead, but also showcased the amazing businesses we work with, and that we’re proud to support in our county. These included local stays, stationery, spa vouchers, and more.
What happens if a client won their own gift (something we had ordered from them as part of the giveaway), I hear you ask?
Well, that was a risk, but with over 1,600 clients, we figured (and crossed our fingers) that the risk was minimal.
Each day we announced the winners on our social media stories, sharing what they had won and who the winner was.
We had such an incredible response from the winners
“WOW, I never win anything, so this has come as a great surprise and warmly welcomed”
“Thank you so much for the exciting news! I’m absolutely thrilled to have won”
Before you ask, yes, we are planning on putting another giveaway together this Christmas, so keep an eye on our socials so you don’t miss out.
Instagram | LinkedIn | Facebook
If you have any questions about gifting and how it works, feel free to give us a call on 01872267267, email us at contact@whyfield.co.uk, or message us on WhatsApp on 077493911.