Why one gift can fall under several rules

A staff gift and a client gift are not taxed the same way, and inside each of those categories, the value of the gift and what it actually is can move it from one HMRC rule to another. Who receives it, what it costs, whether it carries the business's name, and whether it's food, drink or a voucher all change the answer.

Most people sorting out Christmas gifts for a small firm have never had to know this. They just need to know, for this one gift, which rule they're under.

What you tell it, and what it comes back with

You enter whether the gift is going to a member of staff or a client, what it costs, whether it carries the business's name, and whether it's food, drink or a voucher. It returns the rule that governs that specific gift, which will be one of the following:

• A tax-free trivial benefit, where the gift falls entirely outside tax.
• A taxable benefit in kind, reported on a P11D with Class 1A National Insurance contributions due on it.
• An allowable advertising gift, deductible against corporation tax.
• Not deductible, where none of the above applies.

Alongside the rule, it names the HMRC manual page that rule comes from, so you or your accountant can check it independently.

What it doesn't do

It states the rule that fits the details you've entered. It doesn't give advice on your particular circumstances, and the answer is only as good as what you put in, so a gift you've described slightly wrongly, a voucher that's exchangeable for goods when you thought it wasn't, will come back with the wrong rule attached.

Where to read the rule behind the answer

The conditions that sit behind each outcome, and worked examples showing where the thresholds actually fall, are set out on the staff gift guidance and the client gift guidance, each with the relevant HMRC manual reference. If you also need to work out what the gift actually costs once delivery is spread across a list, the gift budget calculator does that separately.