Are Customer Gifts Tax Deductible? UK Rules Explained 🎁

John Massey
Nov 18
2 min read

Updated: 17 minutes ago

Short answer: usually no — most gifts to customers are treated like business entertaining and are not tax-deductible.

But there are specific exceptions where gifts are allowed, and following these rules means you can afford to be a little more generous.

🚫 HMRC’s Default Position on Customer Gifts

HMRC treats customer gifts the same way as entertaining expenses. Under BIM45010, they are generally disallowed when calculating your taxable profits (see BIM45010).

🎁 When Gifts Are Allowable

A gift can be claimed as a business expense if it meets all three of the following conditions:

It costs £50 or less per recipient per year
It carries a “conspicuous advertisement” for your business
- The branding must be on the gift itself, not just the packaging
It is not food, drink, tobacco or vouchers

👍 Common allowable examples

Branded pens
Branded diaries or calendars
Branded mugs / drinks cups

(As long as they’re under £50 and branded).

❌ What You Can’t Claim

Even if branded, the following are not allowable as business gifts:

Food or drink
Alcohol
Tobacco
Gift vouchers
Any gift over £50 per person per year

These are all expressly excluded under BIM45065 & BIM45070.

📌 Key Takeaway

You can give small branded gifts to customers and claim them as an expense — but only if they meet HMRC’s strict rules. Anything that looks like personal benefit, hospitality or a non-branded corporate present will be disallowed.

If unsure, choose a useful, branded, sub-£50 gift — it’s the safest route.

Keep on learning

Thinking of giving gifts to employees?
Or taking the team out for a meal?

Check out my related posts below for advice 👇

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