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Why Is It Important To Thank Clients And Staff At Christmas?


How do you thank clients and staff at Christmas? If you are in quandary as to whether it’s all worth it, our latest article should help. It’s certainly not long to go, but there is still time to send clients and your team a Christmas message or gift. It’s a great time to thank customers and remind them of your brand. Your team has also been working really hard throughout the year, so it’s the perfect time to reward them with something special, so they feel appreciated. In the latest article from team4, bookkeepers based in East Sussex with worldwide clients, we look at why you should thank clients and staff at Christmas, the things you can do, what defines a business gift according to HMRC and whether these things are tax and VAT deductible.

 

Why should you thank clients at Christmas?

 

• Creates a positive association with your brand
• Increases customer loyalty
• Helps to build better relationships
• Leaves a special and lasting impression
• Promotes good will
• Keeps your brand in customer’s minds
• Highlights your appreciation and gratitude
• Gives an opportunity for an extra promotion
• Provides a way of reconnecting with clients

Why should you thank staff at Christmas?

 

• Appreciation of their hard work throughout the year
• Boosts morale for the coming year
• Promotes employee loyalty
• Acts as a reminder of the positive environment they are working in
• Makes employees feel valued
• Improves productivity
• Emphasises they are part of a warm and caring team
• Increases results and motivation

 

How to thank clients and staff at Christmas

 

• Send a thank you message in the form of a Christmas card
• Send a gift for Christmas – thoughtful branded gift
• Take them out for a festive lunch
• Invite them to a special event
• Post about them on social media

 

For customers, you could implement a loyalty programme, possibly discounts on repeat subscriptions, and rewards that accumulate with the more they purchase.

Thanking your team

 

When considering your team, you could give recognition awards, personal gifts and post Christmas incentives. Upgrading their workspace goes down well which could include an ergonomic office chair or an upgraded room for breaks. And don’t forget to get the office into the festive mood with decorations including a tree and Santa hats.

 

What is a ‘business gift’?

 

‘A business gift is a gift of goods that is made in the course of promoting your business and for which you were entitled to reclaim the VAT you were charged on its purchase as input tax. By ‘gift’ we mean a definite, voluntary and unconditional transfer of the goods for no consideration.’

 

If you do want to thank clients and staff at Christmas in this way, it’s probably fair to say that in general business gifts are not tax-deductible as the vast majority fall under the category of entertaining. However, there are exceptions and the specialist bookkeepers at team4 will be able to help you.

 

Tax and VAT implications

 

1. If the total cost, including VAT is less than £50 per employee, tax relief is available for the cost of businessesproviding company gifts to employees. The VAT can also be reclaimed on the cost of the gift. There are exceptions and the gift must not be cash or a cash voucher, cannot be linked to the employee’s performance, or provided as part of a salary sacrifice scheme. Gifts over £50 are treated as a ‘benefit in kin’ and are therefore taxable to the employer and employee.

 

2. Annual office events such as Christmas parties are also allowable for both corporation tax and VAT relief. The so-called ‘annual event’ allowance allows you to spend up to £150 per head on a tax-free event or series of events. However there are a number of points your should be aware of:

 

• The event must recur annually
• Must be available to all employees generally
• The £150 per head ‘exemption’ is inclusive of VAT, as well as any transport to and from the event, or accommodation for attendees
• If the cost of the event is greater than the £150 exemption, then the whole amount and not just the excess may result in a benefit in kind to the employee

 

3. Business gifts allowable for tax purposes to customers or clients fall into two categories:

• Giveaways to the public (like a free sample) to advertise your business
• Gifts less than £50 that advertise your business, not including food, drink or tobacco

 

Vouchers are allowable in this instance, so long as they are not exchangeable for cash. Multiple gifts to the same person amounting to more than £50 are subject to tax.

How can team4 help?

 

We hope team4 has demonstrated how important it is for you to thank clients and staff at Christmas and at othertimes of the year. It demonstrates to clients that you appreciate their continued business and to staff that you recognise their loyalty, hard work and professionalism. Customer retention and satisfaction are the key ingredients to a successful business. By thanking them you are showing that you recognise their invaluable contribution and you are also saying thank you for their ongoing support. If you are confused as to what constitutes a business gift and whether it is tax deductible, please get in touch with team4. You don’t want to be making any costly mistakes. Call us on +44 1825 763378 or +44 1903 442511 or email info@team4bookkeeping.co.uk

How Much Does It Cost To Work From Home?

So, how much does it cost to work from home? The pandemic gave us a once-in-a-generation opportunity to change and reimagine the ways we work. Improved technology meant that working remotely had never been easier. And recent figures from the Office for National Statistics report that between 25 January to 5 February, around 40% of working adults had worked from home at some point in the past seven days. Throughout 2022, the percentage of working adults reporting having worked from home has varied between 25% and 40%. These figures clearly indicate that homeworking has been resilient to the pressures such as the end of the restrictions and the increases in the cost of living. So with no clear upward or downward trend in the figures, team4 looks at how much it does cost to work from home? We explore the tax relief for the self-employed as well as those who are employed.

It’s too easy to just think about the savings you are making

When working from home, it is easy to forget about how much it is actually costing you. It’s all too simple just to think about the savings you are making on travelling to and from work and not eating lunch out at restaurants or paying out for takeaways or drinks from coffee shops. Home working incurs electricity, Wi-Fi and other utility costs as well as broadband and telephone expenses.

What extras do you have to pay for?

  • Electricity to power computers (laptop and desktop)
  • Additional heating
  • Broadband
  • Telephone
  • Office furniture – chair, desk and stationery
  • Insurance
  • Rent and mortgage interest

Energy costs have been rising sharply

When considering the cost to work from home, you will need electricity to run your desktop computer and to charge a laptop. Your home will also need extra heating throughout the day, so it’s important to take into consideration that heating in the UK is extremely high at the moment. The Office for National Statistics reports that although electricity prices fell by 1% between March and April 2023, this has to be compared to a rise of 40.5% between the same two months a year ago. And although gas prices fell by 1% between March and April 2023, this was the first time gas prices had fallen since October 2020. Again, this can be compared with a 66.8% rise between the same two months a year ago.

Broadband, mobiles, office furniture and insurance

Other expenses you will need to consider are the cost of broadband and telephone charges. It’s a good idea to shop around for the best broadband package that will suit your requirements. It is estimated that in the UK, more than a third of broadband usage is used for working purposes. Well made office furniture and an ergonomically made office chair are essential expenses and don’t forget about insurance.

Claim tax relief for your job expenses

HMRC reports that you may be able to claim tax relief for the additional household costs you incur if you work at home for all or part of the week. It clearly states who and who cannot claim tax relief.

You can claim tax relief if you have to work from home, for example because:

 

  • Your job requires you to live far away from your office
  • Your employer does not have an office

 

You cannot claim tax relief if you choose to work from home. This includes if:

 

  • Your employment contract lets you work from home some or all of the time
  • Your work from home because of coronavirus (COVID-19)
  • Your employer has an office, but you cannot go there sometimes because it’s full

 

Tax relief may be claimed on business phone calls and gas and electricity for your work area.

How much can you claim?

HMRC states that you can either claim tax relief on:

  • £6 a week from 6 April 2020 (for previous tax years the rate is £4 a week) – you will not need to keep evidence of your extra costs
  • The exact amount of extra costs you’ve incurred above the weekly amount – you’ll need evidence such as receipts, bills or contracts

You will get tax relief based on the rate at which you pay tax. For example, if you pay the 20% basic rate of tax and claim tax relief on £6 a week you would get £1.20 per week in tax relief (20% of £6).

What expenses can you claim when working from home as self employed?

  • Gas, electricity and water bills
  • Internet and telephone bills
  • Rent and mortgage interest costs
  • Council tax

Some of these running costs can be deducted as allowable business expenses when working out your taxable profit. You can claim for a percentage of your utility bills and you can also claim a proportion of your costs for rent and mortgage interest. You cannot claim for things you use privately. For more detailed information, refer to an earlier blog from team4, which is a guide to self-employed expenses.

How can team4 help you claim tax relief if you are working from home?

It was over three years ago that the pandemic transformed the way we work. Working from home certainly comes with its own financial burden, and we hope this article has explained the cost to work from home. If you are unsure what you can claim for, or you are looking to outsource your accounting operations, don’t hesitate to get in touch with team4. Call us on +44(0)1825 763378 or email info@team4bookkeeping.co.uk