Providing samples of a new product to customers

I am planning to promote a new product in my small retail business. Each customer over the next week will receive a sample as a gift.  Am I able to claim a deduction for this in my accounts, as I am aware that gifts to clients are in some cases not tax deductible?

1st October 2008

Yes, you will be able to claim a deduction for the cost of these free samples and gifts, as, providing they include a conspicuous advertisement for your business, they will be treated as being used for the purpose of advertising.

This does not apply if the gift is food, drink or tobacco, or a token or voucher exchangeable for goods. You must ensure 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. Remember that the advertisement must be on the gift itself, and not just on the wrapping.

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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