BIM45070 - Specific deductions: entertainment: gifts: exceptions: small gifts

Gifts carrying a conspicuous advertisement for the trader

Gifts, which contain a conspicuous advertisement for the trader, are, under certain conditions, not disallowed by ICTA88/S577.

The conditions are:

• That the gift is not food, drink or tobacco, nor is it a token or voucher exchangeable for goods.
• That the cost of the gift (together with the cost of any other such gifts to the same recipient in the relevant tax period) does not exceed £50.

The £50 limit applies to tax years from 2001-02 onwards (for income tax) and accounting periods starting on or after 1 April 2001 (for CT). Before those dates, the limit was £10. The relevant tax period will be the tax year for income tax and the accounting period for CT.

Common examples of allowable gifts are diaries, pens and mouse mats. The advertisement should be on the gift itself, and not just on the wrapping.