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Recruitment company gifts

Gifts for referrals and for new placement

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Hi,
We’re a recruitment company, very small at the moment (husband & wife)...
1. Someone refers a friend to us and we place the friend in a new job. We would like to gift the original contact some gift  vouchers (£200 for example). Can I log this as Advertising/Promotion? If not then what?
2. The friend starts their new job and we send them a bottle of wine as a gift. Again, Advertising/Promotion?
Would really appreciate some guidance here.
Many thanks!

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By David Ex
07th Sep 2021 21:45

If you don’t have an accountant, get one now. It’s a false economy not to have professional advice - especially in the early years of a business.

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim45065

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Replying to David Ex:
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By dayoungda
07th Sep 2021 22:29

Thanks for the advice. I appreciate what you’re saying. We are currently ’in between’ accountants as we have relocated and will be looking to speak to someone very shortly.
In the meantime though, just on this query, can I enter this as entertainment, or is their a more relevant category I should use?

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Replying to dayoungda:
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By David Ex
07th Sep 2021 23:21

dayoungda wrote:

In the meantime though, just on this query, can I enter this as entertainment, or is their a more relevant category I should use?

You mean for accounting purposes? Depends what level of detail you want to maintain. Gifts is the obvious description and they are literally given to promote the business, I guess.

You need to consider VAT too. Not my area but pretty sure you can’t recover the VAT.

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Replying to dayoungda:
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By Leywood
07th Sep 2021 23:54

‘In between Accountants’
You don’t need to change accountants just because you move.

But it’s not exactly an urgent question, so just pop it to suspense or an accountant called ‘refer to Accountant’ and ask your new Accountant when you do get a new one.

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By Tax Dragon
07th Sep 2021 23:53

Someone invites us lot round for a meal, I might bring a bottle of wine. That's not advertising/promoting. Not sure how it could be described as such in your scenario either.

Is this a new business practice? You didn't do it while you were engaged with your previous accountant, obviously, or you would already know how to treat it. Imho it really was a bit careless to let the old accountant go before you had engaged with a new one.

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By Hugo Fair
08th Sep 2021 00:34

The reason you need to speak to *your* accountant (not just *an* accountant) is because they will be prepared to spend time with their client (you) finding out what you really want to know ... and only then providing some relevant answers.

For instance, you can "log this (or anything else) as Advertising/Promotion" - because that has no specific meaning. You are presumably trying to ask where it should be recorded in your books ... but will then want to know if it is tax deductible, how to treat it for VAT purposes, whether there are other ways of rewarding your 'finders' and 'placees', all of which will no doubt then lead to further questions.

BTW if you're new to the Recruitment industry, you need to be very clear whether you are providing one of the traditional services (where your client is the employer) or one of those where the candidate is your client (possibly as an add-on to other training/apprenticeship/etc services). It's the most common mistake when starting to not be clear on this - and it will come back to bite your posterior if you're not careful (due to conflicts of interest).

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By Paul Crowley
08th Sep 2021 10:21

Go back to Bentleys
Their accounts looked as if prepared by proper accountants

Your last accounts look like you prepared them yourselves

The 2020 comparatives do not agree so the tax is likely to be wrong if you submit the Corporation tax based on those accounts

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Replying to Paul Crowley:
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By Leywood
08th Sep 2021 12:58

DIY. Make it up.

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Replying to Paul Crowley:
Stepurhan
By stepurhan
08th Sep 2021 13:52

I especially like how the capital that was fully paid in 2020 has somehow become unpaid in 2021.

You have to admire the commitment to ensuring the confirmation statement is up to date though. Filed twice in two days with no changes to either.

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Replying to stepurhan:
paddle steamer
By DJKL
08th Sep 2021 14:19

I more like that the 2020 comparatives in the 2021 accounts bear little relation to the 2020 accounts submitted, 2020 submitted has a balance sheet positive £121 the 2021 comparative has morphed this to a negative balance sheet of £1,957.60.

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