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HMRC internal manual

Business Income Manual

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Specific deductions: entertainment: gifts: exceptions: small gifts

S47 Income Tax (Trading and Other Income) Act 2005, S1300 Corporation Tax Act 2009

Gifts carrying a conspicuous advertisement for the trader

Gifts, which contain a conspicuous advertisement for the trader are generally allowed by the above legislation.

However, expenditure of this kind is not allowable if:

  • the gift is food, drink, tobacco or a token or voucher exchangeable for goods, or
  • the cost of the gift, together with the cost of any other gifts (except food, drink, tobacco or a token or voucher exchangeable for goods) to the same recipient in the relevant tax period, exceeds £50.

The relevant tax period is the tax year for unincorporated businesses and the accounting period for companies.

Common examples of allowable gifts are diaries, pens and mouse mats. The advertisement should be on the gift itself, and not just on the wrapping.