If you are a company director, it is important to keep your personal money separate from your business’ money. Why? Because if you use the bank card of your business for personal purchases or bills, that expenditure is treated as a loan to you. This loan creates a corporation tax charge if you cannot clear it within nine months of the company’s year-end, potentially resulting in a personal tax charge. However, there are some instances where this rule does not apply – we explain these in more detail below.

Can Directors Purchase Gifts Tax-Free?

With every rule comes exceptions which means that it is possible for your company to occasionally purchase unsolicited gifts for you and your family without any tax implications, providing that:

  • The gift costs no more than £50 (VAT inclusive)
  • The gift is not cash or a cash voucher
  • You are not entitled to receive the gift as part of any contractual obligation
  • The gift is not provided in recognition of services that you perform for the company

This means that gifts can be anything from handbags to books, though it is important to keep in mind that linked gifts (such as a monthly subscription) count as one gift, so over time, they would exceed the £50 limit.

Lastly, a director can only receive up to £300 worth of such trivial gifts tax-free each tax year, including gifts to family members.