Gift or Direct Expense?

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Hollysan
Hollysan Registered Posts: 68 Regular contributor ⭐
Hello everyone,

If a client buys champagne as a thank you to a customer, or flowers to apologize for late delivery etc, is that a gift or a sales cost/direct cost? What do you think? I keep changing my mind...

Many thanks for your thoughts.

Hollysan

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  • T.C.
    T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
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    I always stick the the old rule that it should have an advert on the packaging of the "gift", then it is an advertising expense not an entertaining one. My opinion anyway.
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
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    The flowers, I would put in Sundry Expenses.

    The Champagne I would code to Entertaining and disallow for tax.
  • Hollysan
    Hollysan Registered Posts: 68 Regular contributor ⭐
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    Thanks

    Monsoon and TC: Thanks very much for your replies. I have left flowers in sundry and disallowed the champers as suggested - you couldn't call it an advertising vehicle, could you?!

    This is where I miss working with other people - normally I rely on my 'gut' feel for these things, but when you think about it too much, you doubt your judgement, and that's when a second opinion helps.


    thanks again,

    Hollysan
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
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    A gift of alcohol, tobacco or food is not tax-deductible unless, exceptionally, it is a trade sample.

    Gifts of less than £50 per recipient which carry advertising such as stickers, mugs, diaries, tax cards and keyrings are generally allowable as advertising and promotion.
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