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