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Merry Giftmas
Tax exemptions for small business owners at xmas.

Did you know there are a couple of tax exemptions you can make use of around the holiday period? Our friends at Maslins pointed us to some xmas treats.

It’s probably a bit of a myth that freelancers don’t have a work Christmas party to go to.

In reality, we often get invited to celebrate with our clients, we meet up with fellow community members, many of are very happy not to have to go to the dreaded enforced-fun-time-company-party, or simply we create our own celebrations.

We spoke to our friends at Maslins, the employee-owned accountancy firm who focus on freelancers and contractors, to ask for their tips on what you can claim as a small business when feeling festive.


Annual Staff Party

There’s 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). What this means in practice is you can have a nice meal out with your family and the meal will be paid for by the company (receiving CT relief). You as an individual will not suffer any personal tax! 

Bear in mind - it’s 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 per head, the whole amount becomes taxable.


Client Gifts

If any of your clients are worthy of a gift, please note that none of what you might normally consider typical gifts are 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, providing the gifts meet all of the criteria below:

+ cost no more than £50 per client per year

+ not be food, drink, tobacco or vouchers

+ have an advert for your company (i.e. be branded with your company name or logo)


Common examples include a branded mug, pen, t-shirt. By all means, get creative, just make sure you meet all of the criteria above if you want corporation tax relief.


Trivial Benefits

If you don’t have any employees (or don’t like your clients), why don’t you use this tip 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 that can’t be cash. As with staff entertainment, the present’s value must be no more than £50 else the whole amount becomes a taxable benefit in kind.

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


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A huge thanks to Maslins for making us aware of these benefits for small company owners, and it goes without saying that you should take financial advice from professionals, rather than us at Leapers - but hopefully some of these pointers might help you have the right conversation with your accountant (if if you don’t have an accountant, consider how much value they might create for you - something to plan for the new year perhaps!)

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