Corporate Gifting Policies in UK
Finding the perfect gift for family and friends at this time of year can be a laborious task – but what about colleagues, employees, and clients? While corporate gifting can be an incredible relationship-building tool, there are a plethora of complex rules and regulations surrounding how, when and what businesses and their representatives are permitted to give.
According to research by gift card provider One4All, the UK corporate gifting market is worth an estimated £78 million, with corporate gifting an integral part of the strategy for many businesses in terms of building and maintaining strong professional relationships, retaining clients and rewarding staff. However, corporate gift-giving can be a minefield; walking the fine line between bribery and goodwill, picking an appropriate gift and maintaining the appropriate records can be an overwhelming task.
Many people think corporate gifting is as simple as picking a gift, sending it to your chosen recipient and forgetting about it; that is not the case. Not only is it a legal requirement to keep a written record of all corporate gifts given and received, but your company will also have its own comprehensive corporate gifting policy to which you must adhere.
Buying gifts for clients and staff can be a great way to express gratitude,
however, to avoid repercussions from HMRC it is important to know how much you can give/claim on expenses and the type of gift for which you can claim. Currently, HMRC allows businesses to claim tax relief on business gifts worth up to £50 per recipient, per tax year; however, these gifts must be business-related (e.g. business diary) and must not be food, alcohol or tobacco. Similarly, a corporate gift is not permitted to be a voucher that can be exchanged for any of the forbidden items. Any gift worth over more than £50 will be fully taxable, and you will not be able to claim tax relief for any part of the gift.
When it comes to giving gifts to employees, the rules are slightly different. All gifts to staff are taxable, however, business are permitted to spend £150 a year, per employee on a company party. The party can be held at any time, and the allowance may be split between multiple, smaller parties over the course of the year, as long as the spend does not exceed £150 per employee. If you spend more than £150, HMRC will disallow the entire amount, and the full £150 will be taxable.
The Bribery Act 2010, came into force in July 2011 and aims to promote anti-bribery practices among businesses. Therefore it is considered a criminal offence for businesses to participate in or fail to prevent bribery by anyone working on their behalf; anyone found to be breaking the law may face up to 10 years imprisonment and an unlimited fine. The distinction between a bribe and a corporate gift is often unclear, with many, well-intentioned businesses falling foul of the law, and finding themselves in hot water.
To avoid repercussions, and help you navigate the choppy waters of corporate gift-giving, the team over at Hamper.com have put together this handy infographic with some of the most important dos and don’ts of corporate gift-giving, along with some top tips for ensuring you are fully compliant with relevant laws and legislation, and don’t end up on the naughty list this festive season.