Merry Christmas Everyone from Tax Rebate Services

We’ve made it to the end of another year feeling that our Christmas celebrations have been well and truly earned. Hopefully you’ve got some time off planned into your work schedule. We definitely have and you’ll find our festive season opening hours at the bottom of this page.

Thank you to our clients old and new

As we pause to rest, reset and enjoy ourselves, its natural to find ourselves feeling grateful. Our gratitude is usually for familiar things like family, friends and our homes. It can sound trite, but it’s a lovely element of the festive season.

From a work perspective, we’re grateful for you. Thank you for remaining, or becoming, our clients. It’s great to have so many long standing relationships with individuals and businesses of all shapes and sizes.

We’ve had so much support from people this year. And every single ‘thank you’ has been appreciated. It really does matter to us, as a business and as people, when our clients take a moment to tell us what they like about our service.

So now seems like an excellent time to simply say, ‘thank you’.

Little Xmas reminders relating to tax

This wouldn’t be a TRS blog without a helpful tax based list! Here’s our reminder of what is and isn’t a festive tax deductible.

Christmas cards: a tax deductible expense – spread that joy! Just makes sure there’s a clear ad for your business on them.
Charitable donations: many businesses choose this time of year to donate to charity, sometimes instead of sending Christmas cards. You can then deduct this amount from your profit before paying Corporation Tax.

Gifts for employees: These aren’t taxable as long as they cost under £50 per person. This is VAT inclusive and, if you go over this limit, the whole amount becomes taxable not just the amount over £50. This comes under ‘trivial benefits’ rule. Yes, the name’s rather diminishing, isn’t it? But it just refers to the amount being small, not the sentiment behind the gift – which is anything but trivial. An important note, cash is not included in this HMRC rule.

Christmas party: Keep this tax deductible by making sure you only spend £150 per head. This is the annual amount that’s tax deductible and can be split across different events. For example, a Christmas Party and a summer barbeque. It can pay for food, drink, accommodation, transport and entertainment. But if you go over that £150 per person limit, the whole amount becomes taxable because it isn’t defined as a tax allowance. To accommodate the restrictions of the pandemic, this also applies to virtual Christmas party events.
Presents for clients: There are some specific rules around pressies for your clients. Anything that’s a free sample of your product is entirely tax deductible. Gifts of food, tobacco, drink or vouchers aren’t tax deductible unless they are your free sample. Only presents that are fully branded and worth up to an annual total of £50 are tax deductible.

Parties for clients: Entertaining clients isn’t tax deductible at any time not even at Christmas.

Remember, you don’t have to give a physical present or have a party in order to spread some seasonal joy. Other things you might do for your staff:

Give a paid half day Christmas shopping day

Allow people time off to go and see their child’s Christmas performance
Connect with the charity you support, or ask a local charity, if there’s some way you can get involved with their Christmas fundraising as a group – carol singing time anyone?
Ask your employees for their ideas

Of course, whatever you do must be compatible with how your business runs. But sometimes a more creative approach to the festivities can lead to something that’s even more enjoyable for everyone. And feeling like you have to give a gift or have a party ‘because that’s what’s we always do’ can get in the way of that.