Many businesses like to go above and beyond for their clients when it comes to thanking them for their loyalty. Nice little touches, like client gifts, are an effective way of showing thanks to your customers.
Your business may be small, such as a dog walking service, or something on a larger scale such as an industrial cleaning company.
Small or large, you wouldn’t be where you are now without customers. Showing your appreciation will go a long way to cement that relationship. A well thought out client gift can help with customer retention.
Are Client Gifts Tax Deductible?
Generally speaking, client gifts are not tax deductible.
Gifts bought for clients largely fall under entertaining costs, in the same way, as a Christmas party would. However, there are a few instances where gifts would be tax deductible. Any advertising costs incurred can be claimed, as can charity gifts and employee gifts.
HMRC has very strict criteria for client gifts to be eligible for a tax deduction. Firstly, they should be under the value of £50 and secondly, they should have your logo or brand on them. With this clear advertisement, you can offset your client gifts against your taxes. They cannot exceed £50 during any 12 months per client.
Within the above exception to the tax rule, you cannot include; alcohol, food or tobacco. Tax relief will also not be given for gift cards. Should you want to claim tax relief and gift at the same time, you can consider giving clients free samples of your work. This is seen as advertising and can, therefore, be claimed.
VAT Rules
You do not need to worry about output VAT when you stick to a value of £50 and under per client per year.
This is also the case if the gifts you send are free samples from your business. If the £50 limit is exceeded, then VAT will be applied. The HMRC website has a detailed guide on this.
Client Gift Ideas
We have included below some client gift ideas that will help convey your gratitude. A gift doesn’t need to be expensive or big to be appreciated and loved.
- A candle gift set.
- A food hamper.
- Posh coffee or tea.
- Bath bomb.
- Wax melts.
- Flowers or a plant.
- A notebook or journal.
- A book.
- A keyring.
- Set of wine glasses.
Small Thank You Gifts
It is possible to say thank you without breaking the budget. Our suggestions below are inexpensive yet thoughtful. A great way of saying subtly thank you.
- Engraved thank you plaque.
- Pampering set.
- Handmade soap.
- A reusable coffee cup.
- A Bottle opener.
- Tote Bag.
- Framed picture.
- Wildflower seed mix.
- Note cards.
- Bookmark.
Corporate Gifts – Branded Business Items
We know the advantages of sticking your logo on gifts for clients – they are tax deductible. Below are some great gifts that will look great with your company brand on them.
More than this though, they are useful and thoughtful gift ideas. The more useful they are, the more likely they are to be kept and used – giving a lasting reminder of your business to your client.
- Funky pen set.
- USB sticks.
- Wireless charger.
- Toiletry bag.
- Hip flask.
- Tree decoration.
- Alcohol with personalised logo.
- Bottle stopper.
- Water bottle.
- Fridge magnet.
Accepting Gifts from Clients
Have you ever considered it morally wrong to accept a gift from a client? Sometimes caution should be exercised.
Clients will often feel so grateful for the work you have carried out that they want to gift you. While this is a lovely gesture which should be received gratefully. It is important to keep some things in mind. There is a certain etiquette to observe when it comes to accepting a gift from your client.
Receiving a gift can be both flattering and may be slightly uncomfortable. You may feel like your client already spends their hard earned money on your services, without having to gift you too. It is also very flattering and shows just how much they value your business.
Some small businesses have very close relationships with their clients and see them regularly. It is not uncommon, therefore, for gifts to be exchanged.
The company you work for may have a policy in place for receiving client gifts. If this is the case then it is important to know this and follow it. Some employers do not allow clients to gift the employees. You should make this clear to all your customers from the offset.
What To Say When You Receive A Gift
Sometimes, you might be caught off guard and receiving a gift sends your mind in a spin. It is important to react accordingly with a degree of gratitude and humility.
A heart filled ‘thank you’ will go a long way. What else can you do to show how touched you are? Well, you could have some thank you cards in your possession for such occasions.
Knowing in advance how to react when you are gifted is essential for the well being of the relationship you have built. You don’t want to appear awkward or ungrateful as this will offend your client. Accept your gift graciously and follow it up with a handwritten note – this personal touch will be appreciated.
