Gift given to another company (flowers)

Accounting
1

Hello Quickfile,

We have given a gift to our best customer. Flowers worth £25+VAT.

I have no idea how to tag this from the bank screen. Can you help?

Thanks

Gavin

2

It’s always a tricky area and there are a few gotchas when it comes to issuing gifts to clients.

Although we can’t provide a definitive answer there are a couple of posts here you may find useful.

Business Gifts - AccountingWEB

How to buy gifts for your clients and claim on expenses

3

Thank you,

It seems reading this that it qualifies as a gift under £50.

How do we then actually tag it? Do we create a new supplier and just run it through like any other purchase, or is there something more complicated?

Thanks

Gavin

4

Creating a supplier and creating a purchase invoice for the relevant nominal (in your case, ‘Gift’) should be OK.

If you want to be sure about the gift query, I would recommend running it past an accountant (I’m not one)

5

Gavin,
Did you miss the condition that to be an allowable gift for tax it must prominently advertise your business, for example a pen engraved with your business details or hats, tee shirts, novelties, mouse pads, mugs all supporting an advertisement.
The only exception the HMRC give is when the gift is part of the sale or contract, like when selling each new car the customer gets a bunch of flowers as part of the sale