Gift of Goods and Samples to Customers

To encourage more custom to my new shop, I am planning an exhibition evening for a number of products. I will be inviting members of the public and clients for an open evening, and will be providing small samples and a gift to everyone attending. Can I claim a deduction for this in my accounts?

1st July 2009

To be allowable for tax purposes, the legislation states that you must ensure that the gifts being made are not food, drink or tobacco, nor is it a token or voucher exchangeable for goods and that the cost of the gift (together with the cost of any other such gifts given to the same person in the tax year) does not exceed £50. The gifts must contain a conspicuous advertisement for your business, and you must ensure that the advertisement is on the gift itself, and not just on the wrapping.

However, if you are providing free samples of a new product that you are promoting at the event, assuming they satisfy HMRC criteria that they are “provided in the normal course of your trade”, and “given with the object of advertising to the public generally”, then you will be able to claim a full deduction for the cost of the free samples.

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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