Gifts of Food and Drink

Do you give your clients gifts including Food and Drink?

Did you know that these types of gifts are only 50% deductible?

As per the IRD, gifts of food and drink that will provide a private benefit to the recipient and a business benefit to the taxpayer are only 50% deductible.

Example:

A web design company sends a goody box of cakes and biscuits to their client each time a website goes live. They are only permitted to deduct 50% of the cost of the goody box as it is provided away from their premises in the form of food.

If they were to provide a gift containing mixed items such as candles and hand soap, the cost of these items are fully deductible but the food portion is still only 50% deductible.

As qualified accountants, we can advise and help you determine the correct treatment of your expenses. You can contact us or visit the IRD website for further information.