While the Christmas party debate rumbles on, we still want to tell our staff and clients that we are thinking of them at Christmas.  Tax shouldn’t be the main reason you chose your gift, but in these tough times, getting tax relief on the cost will help!

Your gifts will only get tax relief for your business, and you can only reclaim the VAT if the gift is:

• NOT food, drink, tobacco or a voucher AND
• Carry a conspicuous advert for your business AND
• The cost of that gift, and any other to that person in the year is under £50

A “conspicuous advert” means that your logo etc should be on the gift itself and not just on the packaging, which also makes it harder!

Whether you can get the tax relief or not on your Christmas gifts, why not support a local business this year that really needs your help. It has been a tough year and many local businesses rely on Xmas trade to keep them going throughout the rest of the year.  Rather than a generic voucher for someone who is hard to buy for, buy one from a local business or venue and show your support. Local facebook groups are full of small businesses advertising some lovely festive gifts.

You could also consider a donation to a local charity or business supporting those who are really going to struggle over the festive period. Charity donations through your limited company are tax efficient and another way to help those in need this Christmas.

What about the Xmas party?

If you do want to have a night out with your staff, a reminder of the tax rules surrounding Xmas parties.  For a limited company, the cost for the annual party is allowable for tax as long as it is under £150 per head (all staff have to be invited but the cost is per head – “plus ones” can also be invited.)  Staff means those on the payroll – freelancers, sub-contractors etc unfortunately don’t qualify!

Whatever you end up doing for Xmas with your colleagues, you’ve made it through the year – well done, and have a good break!

The 3rd grant for the self-employed covers the 3 months from 1 November 20 to 31 January 2021.

Originally this was to be 20% of average profits, then it was increased to 40% in early October and now to assist with lockdown, it will be 80% for November, and then 40% for December and January  – this gives you the average of 55% for the 3 months being mentioned in the press.

The grant will be paid out in a single instalment and is capped at a maximum amount of £5,160.

The claim date has been brought forward to 30 November from the middle of December, so money will be paid out sooner than originally planned.  As before HMRC will contact you if they believe you may be eligible to claim.

The criteria for claiming has not changed from that set out for the first 2 grants – so if you were not eligible then, then unfortunately you will still not be able to claim this time.

For this grant you must also declare that you intend to continue to trade and either:

• you are currently actively trading but are impacted by reduced demand due to coronavirus
• you were previously trading but are temporarily unable to do so due to coronavirus

For previous grants the criteria was that you had to have been “adversely impacted” by the virus, so the change of words is interesting!

The 4th, and final grant (at the moment) will cover the period 1 Feb 21 to 30 April 21 and the level of this will be announced nearer the time.

For those who can claim, this is obviously positive news; but for those that missed out last time, either for being newly self employed, or for having other sources of income, they will still feel that they have been overlooked by the government.