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Spondoo Accounting
Call for Assistance: 02033 259 341
Spondoo Accounting

Can I buy my employee a gift via my business (limited company)?

May 27, 2021
Yes, but you need to meet the following conditions to avoid tax issues:
  • Ensure it is less than £50.
  • Ensure it is not cash or cash equivalent (such as a voucher).
  • Ensure it is not linked to the employee’s performance.
  • Ensure it is not specific or attached to the employee’s contract.
Providing you meet the above conditions your gift will be considered a Trivial Benefit, giving you the following tax benefits:
  • You can pass the gift to your employee without triggering income tax, national insurance (or PAYE & BIK obligations)
  • You can reclaim any VAT incurred in purchasing the employee’s gift
  • You can obtain Corporation Tax Relief in computing your company’s taxable profits
Warning – the total number of trivial benefits in a given year are capped at £300 for directors of close companies. Excessive use of trivial gifts can also be challenged by HMRC so should not form part of a regular pattern.
If the gift does not meet any one of the above criteria, it is likely that you will lose all the tax benefits.

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Information provided on the site is merely guidance that may change in line with UK law and regulations. Users must not consider this to be financial advice or their sole resource when making any financial decision. Spondoo is a trading name for Accounting SQL Limited, authorised & license accounting firm under the Institute of Financial Accountants.
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