Christmas Expenses You Can Put Through the Books in a UK Ltd Company

The Christmas period is not only a time for celebration but also an opportunity for UK limited companies to make tax-efficient spending decisions. When handled correctly, certain festive expenses can be treated as allowable business costs and help reduce your corporation tax bill.

Staff Gifts and Employee Benefits

Staff gifts are one of the most common deductible Christmas expenses. A company can give employees gifts worth up to £50 per person per tax year without triggering a tax or National Insurance charge, provided the gift is not cash or a cash voucher. Typical examples include gift cards, hampers, or bottles of wine. If the £50 limit is exceeded, the entire amount becomes taxable, not just the excess.

Christmas Parties and Staff Events

Christmas parties and staff events are also tax-efficient. A UK Ltd company can claim up to £150 per employee per year (including VAT) for annual events such as Christmas parties. This allowance can cover multiple events across the year, as long as the total does not exceed £150. Importantly, the event must be open to all employees to qualify.

Client Gifts and Other Festive Costs

Client gifts are more restrictive. Promotional items displaying your company logo (for example branded mugs or calendars) may be deductible, but gifts such as alcohol, food, or entertainment are generally disallowed for corporation tax purposes.

Other allowable festive costs may include office decorations, seasonal marketing campaigns, and staff bonuses, provided they are incurred wholly and exclusively for business purposes.

As always, keeping clear records and seeking advice from your accountant will help ensure compliance while making the most of Christmas-related tax reliefs.

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