Clear and presents danger – a guide to corporate gifting

Authored by Hazel Davis.
4 min read
toy soldier antique christmas decoration

The tricky business of corporate gifting must be negotiated with care. Especially where it involves lingerie and halitosis. Business writer Hazel Davis shares some tips for giving to staff and clients

It’s hard enough working out which talcum powder your elderly aunt wants for Christmas. But navigating the choppy waters of gift-giving for staff and clients can be even worse.

After all, while you’re tying up business for Christmas, the last thing you want to be doing is wrapping presents for ungrateful employees or customers. And perhaps, ones that aren’t even legal.

Don’t Porsche me too far

Gifts and hospitality have always had a part to play in greasing the wheels of the corporate machine.

It’s crucial to know when the line between gift and bribe is in danger of being blurred. If you’re on the cusp of sealing a huge deal, then beware of slipping the MD a diamond ring or fast car.

Likewise, if you’re eyeing up a nice promotion, think twice before lugging those skis you “just saw on the way to the office and quickly wrapped up” for your boss.

Similarly, if there’s an element of “expectation” of something good in return then you could lay yourself open to accusations under the 2010 Bribery Act.

Giving a present to a public official could be considered a “facilitation payment”. It comes down to the appropriateness of the gift according to the giver and receiver.

Do as you would be done by

The best way to approach the Christmas gift dilemma is to ask: “If I accept this shiny Bentley, am I able to offer the equivalent gift in return?” If the answer is no, then you might want to unwrap that box of Matchmakers (albeit sadly) and give them to your neighbour instead.

Some companies avoid this difficulty by banning presents altogether, but this has its own challenges, especially if you are dealing with international clients where gifts are seen simply as a traditional act.

Some companies accept the gift but then donate it to a charity or auction it. Whatever you decide, it’s a good idea to have a gift and hospitality policy.

Have an HMRC Christmas

Any gift policy should take account of the tax implications of present giving. “Gifts to customers are only allowable as a tax deduction if the total cost of gifts to any one individual per annum does not exceed £50, and the gift bears a conspicuous advert for the business and is not food, drink or tobacco,” says Anthony Beard, managing director of AIT Accountants. “However,” he adds, “it is worth noting that samples of a trader’s product are allowable even if they are food, drink or tobacco.”

You’d think a voucher would be a fairly innocuous thing to buy your staff but, says Beard, “these are subject to tax and NI on the individual.”

Trivial gifts such as turkeys and chocolates are fine. Give vintage fine wines and hampers, on the other hand, and you’ll find yourself filing out some forms come July.

Luckily, says Emily Coltman, chief accountant at FreeAgent, “you can include the cost of gifts for employees in your accounts as a tax-deductible expense, and you’ll be able to reclaim any VAT on gifts to employees (though you might be paying VAT on them in the first place).”

Gifts to take the breath away

So what to buy? Gifts for colleagues or staff, as with friends, need to be well judged. Deodorant’s probably a no, as is underwear. Unless you’re married to them and then, are you sure you really want to work in the same office? Anything too bland or inappropriate, however, and you risk looking disengaged.

Some well-meaning presents can cause offence in the wrong hands. Susie Jones, working in Hungary for a year, recalls clubbing together with colleagues to get her halitosis-plagued boss dental treatment. “He was really pleased, though,” she muses.

Teaching assistant Sally Hughes says: “I have been bought a huge box of chocolates when I was obviously on a diet and some oversized tights (about five sizes too large).”

A lacy-faire attitude

A former receptionist for an engineering firm recalls her boss’s gift of a lingerie voucher: “It was horribly misjudged, but not in a sexual way. He was just so clueless about so many things and he had no idea how to say thank you.”

There are some areas of safety. Practical gifts such as magazine subscriptions that the whole office can share are a good bet. Almost everyone uses (and regularly loses) smartphone chargers or electrical sundries such as headphones.

I was mugged

A journalist friend offers a cautionary tale. She remembers her boss of many years ago, one of the last grandes dames of publishing. “She used to begin hinting in September about the necessity of an early start when collecting for her present.

“Having duly clubbed together and bought something glittery and lovely, we would gather around the Christmas tree in her office to receive our own ‘little somethings’ one by one.” It didn’t always work out.

“One year she bought us each a cheap mug that said, simply, ‘MUG’. At least we were clear what she thought of us.”

At Hiscox, we want to help your small business thrive. Our blog has many articles you may find relevant and useful as your business grows. But these articles aren’t professional advice. So, to find out more on a subject we cover here, please seek professional assistance.

Hazel Davis

Hazel Davis writes for The Telegraph, Times, The Guardian and Financial Times among other publications on subjects including business, property and lifestyle. She was UK classical music correspondent for Billboard magazine and editor of classical music magazines Muso and Link, and contributes to the Strad magazine.