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On what basis to we include gifts ?
I know the rule tht they are an allowable deduction if they cost less than £50 are not of food etc.should we take gifts that are above or below £50 that display names or don’t or advertisements,the pens n food hampers examples . I’m confused
1. Are they food, drink, etc?
2. Is the cost more than 50.
3. If less than 50. …..exempt
4. If more than 50 ……include the entire amount.Simple tc
Sorry….one more point…. goods which display names/ for advertisement are only taken for 50 pound criteria.
In Q48 Gastron (bpp)
Gifts to customers (Hampers of food costing 25) has been included in the calculation
why is that ?
If its less than 50 it should be exempt ?A: Gift to customer (food, drink , etc) : not deductible from trading profit. therefore we add that back.
B: gift to customers(non food items like pens, tshirt etc having name on it only…specially for advertisement) upto 50 pounds are the only ones allowed to be deducted from trading profit. if advertisement gifts are more than 50 pounds …non deductible….add back the whole amount
eg: gift of food hampers to customer, costing £25 each ……not allowed as food = £250
gift of pens having name of the company to customers , costing £50….alllowed = £500
gift of pens having name of the company to customers , costing £60….not alllowed = £600 …add back whole amount of 600 to net trading profit…i hope this was helpful.
read again the rules for getting tax adjusted profit.
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