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Corporate Gifts to Clients: what are the rules?

Updated: Jun 2, 2023


It’s only right to want to thank those who matter to your business. Corporate gifts are a great way to nurture and maintain client relationships, some of which span years. But as with most things in business, there are rules around hospitality, promotional and business expenditure.


So what exactly are the rules around corporate gifts to clients? To help you, we’ve put together a handy guide. Keep reading to learn:


  • The law on giving corporate gifts to clients

  • What your company corporate gift policy should include

  • What your company gift register should detail

  • The tax rules around corporate gifting

  • What to consider before gifting clients

  • How BOW Gifts can help.


Are you allowed to give gifts to clients?


Yes, and giving gifts to clients is a healthy business practice when done correctly. The 2010 Bribery Act is designed to prevent corruption, not to stop corporate gift-giving.


Gifts to clients are allowed but only if it’s clear you expect nothing in return. In other words, as long as your intention is not to bribe.


First, let’s be clear on the difference between a bribe and a gift.


  • A bribe is something of value given as an inducement with the intent to influence a decision.

  • A gift is something of value given without expecting anything in return.


The Serious Fraud Office (SFO) recognises that bona fide gift-giving is an important part of doing business. So as long as there’s a legitimate, business purpose and your gift is reasonable and proportionate, you’ll be on the right side of the law.


To reduce the risk of raising eyebrows and avoid scrutiny, check the SFO’s Bribery Act guidance or the Ministry of Justice’s guidelines.


Before sending a corporate gift to a client, you should consider three things:



  1. Timing

Is your gift to mark an occasion? It’s fine to send a client a gift at Christmas, for example. However, you’re likely to come under close scrutiny if you send one at the time of tender, when negotiating a contract or during a dispute with a client. Apology gifts can be sent once a matter is settled when there is nothing to gain.


  1. Intention


Is your gift intended to cement a client relationship or boost goodwill? A thank-you for a client’s custom is generally okay.


Corporate gifts must not be sent to influence a business decision. So don’t send them when you’re pitching for new business, or to sway the outcome of a customer dispute in your favour.



3. Value


There’s no specific limit on the value of corporate gifts to clients. But it should be relatively modest and reflect what’s considered appropriate in your industry. Use your common sense. Sending lavish gifts frequently could be construed as bribery and giving cash is a definite no-no.


The Bribery Act also applies outside the UK. No matter where your company is based or where the alleged offence took place, any company that does business in the UK must comply with the rules.


You can also be found guilty of bribery if your practices are outside of the guidance and you don’t have a company policy in place for the giving and receiving of business gifts. These policies can be straightforward to put into place.



What’s a corporate gift policy and what should it include?


Corporate gift policies are designed to make sure your business complies with anti-bribery laws. At BOW, we recommend our clients have a clear, corporate gifting policy. You should make sure it’s aligned with your company ethics and encourages transparency and integrity in decision-making and behaviour.


Your company corporate gift policy should clearly set out the procedure staff must follow when giving or receiving gifts and include:


  • Scope — who it applies to (full-time and part-time employees on fixed-term contracts, agency staff contractors, interns, spouses and partners, for example).

  • Definition — a clear definition of what constitutes gift-giving

  • Statement —what sort of gifts can be given or accepted, up to what value and how to refuse a gift without causing offence

  • Guidance — who staff can ask for help or guidance (line manager, compliance team etc)

  • Register — where staff can find the gift register and what information must be recorded.


Distribute your company’s gift policy to all employees and keep a gift register.



What should be included in a gift register?


The details of all gifts sent, accepted or declined should be recorded in detail in your annual gifts register. It doesn’t need to be anything fancy. A simple spreadsheet would do. Just be sure to record the purpose of the gift.


Here’s an example:

Table

Are gifts to clients allowable for corporation tax?


Gifts to clients aren’t usually tax-deductible. They’re seen as entertaining costs. There are, however, some exceptions to the rules.


Promotional gifts


As long as a gift costs under £50 and is clearly branded with your company logo it should be tax-deductible. However, your branding should be on the gift itself, not just the packaging. This doesn’t apply to food, drink, tobacco or a voucher and you can only claim for one gift costing less than £50 during a financial year.


Gifts as part of a sale


If a gift is part of a sale it may be tax-deductible. What’s more, there are no restrictions on price and food and drink are allowed. For example, if you offer clients a gift for purchasing a certain number of products, you could claim this as a business expense as it’s effectively a discount.


Gift-giving to charity


A gift to a charity or designated educational establishment is an allowable business expense.



For more information on tax relief and VAT on business gifts, read the government’s business promotions web page.



What to consider when giving corporate gifts to clients


Now you’ve grasped the rules around corporate gift giving, what else do you need to consider?


Before you give any gift, you want to take some time to think about who you’re giving it to. You don’t want to waste time and money on something that won’t have the positive impact you’re after. Or worse, end up in the bin.


Here are a few things to consider:


  • Cultural differences — gifting etiquette varies from culture to culture. Dig into the recipient’s cultural background to make sure you get it right. Some cultures, for example, value the exchange of gifts highly. In others, it’s unimportant. And don’t forget to check the company’s policy on receiving gifts too.


  • Age bracket — someone in their twenties or thirties will appreciate a different gift to a fifty-something-year-old. If you’re buying for a team, bear their ages in mind so you can narrow down ideas that will span all age groups.


  • Branding — do brand your gift but do it subtly. Splashing your logo over every item in a gift box can end up sending the wrong message (less of a thank-you and more of an advertising ploy). Add it to the packaging and to one item in the gift box, for example.


  • Value — A gift’s value isn’t just about how much it cost. It’s about the thought that went into it. Make it useful as well as beautiful and personalise it with a company message card.


  • Message — what’s the point and reasoning behind your gift? What are you trying to say? Your gift should reflect the story and intention you are trying to communicate. It should be rooted in your company’s values and vision, as well as the value you place on the person receiving it.


There’s a lot to think about, isn’t there? If only you could find a company to do all this and more for you. A corporate gift service that could find the perfect gifting solution, perfect gift solution, source, manufacture and deliver them and ensure you comply with all the rules and regulations.


Thankfully, there is…



How BOW Gifts can help


BOW makes corporate gift giving easy. That’s because unlike other corporate gift services, we provide the full package. We think outside the gift box and make your gifting hassle-free.


When you partner with BOW we do it all for you. From concept to completion, including branding, production and worldwide delivery. We can build your own bespoke company gift system, create long-term gifting programmes and measure the impact too.


But that’s not all. At BOW we’re on a mission to change the way companies think about corporate gifting. It’s not a box-ticking exercise. Corporate gifting should be part of your business strategy. Book a call with us now and we’ll explain why.




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