Corporate Gift Packaging: Branded Gift Boxes and HMRC’s £50 Rules
Corporate gift packaging is the branded box, insert and outer a business uses to send gifts to clients or staff. Choose it around the gift, the budget per recipient and the date the gifts must arrive, then check how HMRC treats the gift, because a logo on the box does not change the tax position.
HMRC applies three different £50 tests to business gifts. One decides whether a client gift is deductible, one whether VAT is due, and one whether a staff gift is taxed. They use different periods and different VAT bases, and several published summaries blur them. This guide sets them side by side, then covers the corporate gift packaging itself: formats, inserts, branding, posting and the order timeline. It summarises HMRC’s published guidance and is not tax advice, so check how it applies to your business with your accountant.
HMRC’s three £50 rules, side by side
| Client gifts: tax deduction | Business gifts: VAT | Staff gifts: trivial benefits | |
|---|---|---|---|
| What it decides | Whether the cost is deductible from profits | Whether you must account for VAT on the gift | Whether the employee is taxed on the gift |
| What the £50 covers | This gift plus other gifts to the same recipient in the period | All gifts to the same person in the period | Each gift, per employee |
| The period | Tax year for unincorporated businesses; accounting period for companies | Any 12 months that include the day of the gift | Each gift on its own; close-company directors are capped at £300 a tax year |
| VAT in the figure | Not stated in HMRC’s manual | Excluding VAT | Including VAT |
| Other conditions | A conspicuous advertisement for your business on the gift itself; not food, drink, tobacco or a voucher exchangeable for goods | Applies to gifts made to promote your business where you could reclaim the VAT on them | Not cash or a cash voucher, not in the contract, not a reward for work |
| If it goes over | The gift is not deductible | VAT is due on the total cost of all the gifts | The whole amount is taxable, not just the excess |
For client gifts, HMRC’s starting point in BIM45065 is that business gifts are not deductible, because the law treats them like business entertaining. The exception that matters for client gifts, set out in BIM45070, is a gift that carries a conspicuous advertisement for your business, like the branded diaries, pens and mouse mats HMRC gives as examples. Food, drink, tobacco and vouchers exchangeable for goods never qualify for this exception. A gift also fails if it takes that recipient’s total for the period over £50.
Staff gifts work differently. The business can deduct them, says BIM45074, as long as the same gifts are not also given to others or incidental to gifts for others. For the employee, a gift is tax-free as a trivial benefit if it costs £50 or less, is not cash or a cash voucher, is not in their contract and is not a reward for their work. If it qualifies, you do not pay tax or National Insurance on it or tell HMRC about it. Directors of close companies, run by five or fewer shareholders, are capped at £300 of trivial benefits a tax year.
HMRC’s guidance on the cost of a trivial benefit adds the details that matter for a gift box. The cost includes VAT, the items in one gift are added together, and a gift costing more than £50 is taxable in full. Its own example is a Christmas bottle of wine: £15 bottles for staff qualified, while £140 bottles for directors did not.
VAT is a separate test again. Under section 2.3 of VAT Notice 700/7, you do not account for VAT on business gifts to the same person while their total cost stays at £50 or less, excluding VAT, in any 12-month period. Above that, VAT is due on the total cost of all the gifts to that person. This test has no advertising condition, and the notice’s list of business gifts includes thank-you gifts to customers and long service and retirement gifts.
What the rules mean for the box
A logo on the box is not the advertisement
HMRC’s manual is explicit that the advertisement should be on the gift itself, not just on the wrapping. A branded box presents a gift well and puts your name in front of whoever opens it. For the deduction, though, the item inside has to carry the advertisement. A branded notebook in a branded box can qualify through the notebook. An unbranded candle in a branded box does not qualify through the box.
Food and drink hampers are never advertising gifts
Hampers, chocolates and wine cannot use the advertising exception, however well the box is branded. For staff, the same hamper can still be a trivial benefit if it costs £50 or less, VAT included, and meets the other conditions. For clients, it is not deductible as an advertising gift.
Price the whole gift against £50
For staff gifts, HMRC totals every item in one gift and includes VAT. Its manual does not say whether packaging counts towards a client gift’s £50. The prudent course is to budget the box, the contents and any delivery together, and ask your accountant how to treat them. Keep a record per recipient too, because the deduction and the VAT test both add up gifts to the same person over a period, not just the Christmas one.
If the gift is your own product, given away to advertise it, the rules differ again: BIM45071 allows the cost of free samples given to the public to advertise those goods.
Choosing the box
Pick the format around the gift, the way it reaches the recipient and whether they will keep the box.
| Format | Suits | Check before ordering |
|---|---|---|
| Two-piece rigid box, lid and base | Gift sets handed over in person or at an event | The weight of the set and the insert layout |
| Magnetic closure rigid box | Gifts the recipient keeps and reopens | How the lid opens over the contents |
| Drawer box | Smaller gifts with a slide-out reveal | Space for the drawer to slide clear |
| Collapsible rigid box | Gifts packed in batches; it folds flat when empty | Folded size against your storage space |
| Mailer box | Gifts posted straight to the recipient | The parcel size band and the protection inside |
| Printed sleeve over a box | Branding plain boxes on a tighter budget | The sleeve’s fit over the box |
Our guide to what a rigid box is explains how the rigid formats are built. Storage is easy to forget: a made-up rigid box takes its full size on a shelf, so 100 of them need room before packing day. Spare collapsible boxes fold flat for the next occasion, a trade-off weighed up in our guide to collapsible versus fixed rigid boxes.
Branding options depend on the format and the specification. Printing can go on the outside and the inside of the box, and the finishes include foil, embossing, debossing, spot UV and soft-touch coating. Our guide to packaging print finishes explains each one. A printed sleeve can brand a plain box when the budget per recipient is tight.
Mixed gift sets usually need an insert. Inserts are cut to the product’s own dimensions, so movement inside the box is controlled. Size the box to the items as they sit in the insert, plus the allowance our guide to box clearance and tolerance describes. Fix the contents before you approve the insert, because a late swap of one item can leave a cavity that no longer fits.
Posting gifts to clients and remote staff
Gifts that go by post need a plan for the outer. If a rigid box is going through the post, plan a shipping box around it, as our guide on how to stop parcels arriving damaged does for small rigid boxes. A mailer box can be both the presentation and the protection for lighter gifts. Measure the packed parcel against the bands in Royal Mail and Parcelforce parcel sizes before you book a service.
Planning the order timeline
Work back from the date the gifts must go out. Each step below waits on the one before it.
| Step | What happens | Who does it |
|---|---|---|
| Brief | Gift contents and their sizes, quantity, budget per recipient and the date the boxes are needed | You |
| Design | Artwork for the box, insert and any sleeve | You, with design support |
| Mock-up | A digital 3D mock-up to check before approval | Us |
| Approval | You sign off the artwork and the specification | You |
| Production | The boxes are made | Us |
| Delivery | The boxes travel to your delivery address | Us |
| Packing and sending | The gifts go into the boxes and out to recipients | Whoever packs your gifts |
Standard production takes 6 to 8 business days after approval. Delivery time is additional to production. UK delivery usually takes around 4 to 5 business days after production is complete, depending on the delivery address and courier service. Rush production is available on request, with availability and timing confirmed with the quote. For the wider seasonal picture, see our Christmas packaging countdown.
Common mistakes
- Assuming a logo on the box makes a client gift deductible.
- Branding a food or drink hamper and expecting the advertising exception to apply.
- Checking only this gift, when the deduction and VAT tests add up every gift to that person.
- Leaving VAT out of a staff gift’s cost, when the trivial benefit test includes it.
- Treating a £55 staff gift as £5 over the limit, when the whole amount is taxable.
- Approving the insert before the gift contents are fixed.
- Planning production but forgetting delivery, packing and posting time.
Frequently asked questions
Are corporate gifts to clients tax deductible?
Not as a rule. HMRC treats business gifts like entertaining, with exceptions. The one for client gifts is a gift that carries a conspicuous advertisement for your business, costs no more than £50 per recipient in the period, and is not food, drink, tobacco or a voucher.
Is a branded hamper tax deductible as a client gift?
No. Food and drink are excluded from the advertising exception, and branding the hamper or its box does not change that. For staff, a hamper can be a trivial benefit if it costs £50 or less including VAT and meets the other conditions.
Does the gift box count towards the £50?
For staff gifts, HMRC totals every item in the gift, VAT included, so the prudent course is to include the box. For client gifts, HMRC’s manual is silent on packaging. Either way, keep the packaging cost in the per-recipient budget and ask your accountant.
Can I give staff a gift box tax-free?
Yes, if it qualifies as a trivial benefit: £50 or less including VAT, not cash or a cash voucher, not in their contract and not a reward for their work. Directors of close companies are capped at £300 a tax year, and the business can deduct the cost of staff gifts.
Do I have to account for VAT on client gifts?
Not while the total cost of your gifts to that person stays at £50 or less, excluding VAT, in any 12-month period. Above that, VAT is due on the total cost of all the gifts to them.
Do I have to tell HMRC about staff gifts?
Not if they qualify as trivial benefits. GOV.UK says you do not need to pay tax or National Insurance on them or let HMRC know. A gift that does not qualify is taxed in the normal way.
What is the minimum order for branded gift boxes?
Orders start from 100 units. If your list is shorter, collapsible boxes, which fold flat when empty, are easier to keep for the next occasion.
How long do custom gift boxes take?
Standard production takes 6 to 8 business days after approval. Design, the mock-up and approval come before it, and delivery comes after, as the timeline above sets out.