Christmas is a time for giving, but it's also important to be aware of the tax implications of your generosity. Here are some useful things to know for UK freelancers and small businesses over the festive period:
Buying clients Christmas presents
If you're buying Christmas presents for your clients, you can only claim tax relief if the gifts are:
Of a relatively low value (less than £50 per client, per year)
Clearly branded with your business logo or name
Not food, drink, tobacco, or vouchers that can be exchanged for cash
If you do give gifts to clients, you'll need to keep records of the cost of the gifts and the names of the clients you gave them to.
Buying employees Christmas presents
You can give your employees Christmas presents without having to pay tax on them, as long as the value of each gift is less than £50. If you give them a gift worth more than £50, you'll need to pay tax on the excess amount.
The deadline for filing your self-assessment tax return is January 31st each year. If you're a freelancer or small business owner, you'll also need to pay your estimated tax payments quarterly. The quarterly deadlines are April 15th, June 15th, September 15th, and January 15th.
Staff Christmas nights out
If you're paying for your staff to have a Christmas night out, you can claim the cost as a business expense. However, there are some restrictions on this deduction. For example, you can't claim the cost of food and drink that is consumed during the night out.
Here are some additional tips for freelancers and small businesses:
Keep good records of all your income and expenses, including any Christmas-related expenses. This will make it easier to prepare your tax return at the end of the year.
If you're unsure about anything tax-related, it's always best to consult with a tax professional. They can help you to make sure that you're paying the correct amount of tax and that you're claiming all of the deductions that you're entitled to.
By following these tips, you can help to ensure that you're on top of your taxes and that you're not overpaying. This will give you more money to enjoy the festive period!