Although business gifts are not deductible as a general rule, there are exceptions for small gifts that carry a conspicuous advertisement for the trader, such as a branded diary, mouse mat or pen. However, for a deduction to be forthcoming the gift must not be food, drink or tobacco and the cost of all gifts to the recipient in the tax year is capped at £50.
A deduction can also be claimed for the cost of free samples given to the public.
Kevin is a self-employed handy-man. He wants to give his customers a gift at Christmas. By giving them a mouse mat featuring the logo of his business, he is able to claim a deduction for the cost of the gifts.
Had the mouse mats not been branded, the deduction would have been disallowed.