Monetary gifts to certain users/customers

Accounting
1

I hope that it’s ok to ask accounting related questions here that aren’t specific to QuickFile. Please feel free to close or delete if it isn’t allowed here.

I was considering giving a couple of users/customers of my app a small monetary gift closer to christmas, as a thank you for the support this year, and was wondering if I could use the company accounts to do this or if I will have to front the costs out of my own pocket?

I know it’s not tax deductible as it will probably be a voucher of some sort or a PayPal payment as they’re in different countries, and I’m ok with it not being tax deductible, I would just like to know if I can do this and that I’m not likely to get in trouble later on when it comes to paying my end of year coorporation taxes. I did think of possibly taking a directors loan from the company and pay it back after christmas if that’s allowed but that would still be coming from my pocket in the end and not the companies. That’s ok if that’s the only option though. Being so close to christmas and still having to get presents for some friends and family I didn’t want to front this extra cost myself. I’d much rather it came from the money available in the companies account.

I do have an end of year accountant but you can only ask them so many questions before you feel you’re asking for more than you’re actually paying for so thought I’d ask here first.

If I am allowed to do it what would I need to do for the entry in QuickFile? Do I need a receipt of payment sent via PayPal, or for the voucher?

Thanks in advance,
Kevin

2

This is an example of a site that says HMRC won’t allow it if it’s over £50 or if it’s a voucher/money but it doesn’t say if doing so you’re doing something wrong. Does this just mean that it’s not tax deductible but you can still do it legally? I was considering 5 or 6 people. But much smaller than £50 each.

"HMRC will allow you to give a business gift worth up to £50 to any one person in any one tax year.

The gift must be a business gift, e.g. business diary and must not be food, alcoholic drink or tobacco or vouchers which are exchangeable for food, drink or tobacco.

The gift must carry a conspicuous advertisement for your company in order to avoid being classified as entertainment expenses which would not be allowable.

If the gift costs more than £50, HMRC will disallow the whole amount, not just the amount over £50!"