Income Tax (Trading and Other Income) Act 2005 section 47

Business gifts: exceptions

Section 47 sets out the circumstances in which the general prohibition on deducting expenses for business gifts (under section 45) does not apply, allowing traders to claim a tax deduction for certain types of gifts.

• Gifts of items the trader normally sells, given away as part of ordinary trade to advertise to the public generally, are deductible (Case A).
• Gifts carrying a conspicuous advertisement for the trader are deductible, provided they are not food, drink, tobacco or exchangeable vouchers, and the total cost of such gifts to the same person in the same basis period does not exceed £50 (Case B).
• Gifts provided specifically for the trader's own employees are deductible, unless the employee gifts are merely incidental to gifts also provided to non-employees (Case C).
• Gifts made to a charity, the Historic Buildings and Monuments Commission for England, or the Trustees of the National Heritage Memorial Fund are fully deductible (Case D).