Articles

Tuesday 8th May 2018

Give yourself a gift and save tax

A company can give gifts up to £50 in value to its directors and secretary, without creating taxable benefits. In other words, you can receive a gift from your company and reduce your corporation tax bill. This is known as a trivial benefit.

The gift must be bought by the company, not refunded to the director, and it can’t be a reward for any work or achievement. So for example, the company can give them a bunch of flowers or a Marks and Spencers gift card for Christmas, and this would be considered a gift. However, if you did the same because they had completed a piece of work, then this would be taxed as a benefit to the director. 

Its a great way to take cash out of a small company for a director/shareholder. You can buy vouchers for shops you use regularly, items of clothing, children's birthday presents  - there's no limits on the type of purchase you can make.

It can’t be cash, or a voucher exchangeable for cash. There are no limits on the number you can provide to an employee, but there is a limit of £300 worth of gifts a year for each director/secretary and their family.

Further guidance can be found here

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We will link your business bank account to Xero software. All your income and expenses will feed directly in to Xero. This saves you time in preparing your year end paperwork, and you can even store your documents in Xero