Corporate Christmas gifts face tighter scrutiny
Businesses are advised to exercise caution with their gift giving as Bribery Act 2010 comes into force.
While many businesses have forgone the traditional client gifts this year Christmas thanks to tightened budgets, those who are still feeling generous may find themselves in hot water if they don’t observe the new legislation, warn fraud experts at PwC.
The Bribery Act 2010 is due to come into force next April and contains changes which could have an impact on corporate gifts to customers and clients, which could lead to severe penalties for those who don’t play by the rules.
“Christmas is the peak season for client entertaining and gift giving but companies would be wise to ensure their policies in this area are adequate and are properly enforced,” advised Edwin Harland, director of PwC’s forensic services practice.
“Employees need to be made aware exactly what the rules are in this area. Suppliers should also be made aware that excessive gifts and hospitality are often not wished for and can be counter-productive.”
According to draft guidance from the Ministry of Justice, promotional expenditure which is “reasonable and proportionate” should not cause problems but no monetary levels are supplied. Instead the onus is placed on companies for the “establishment and dissemination of any appropriate standards”.
Gift do’s and don’ts
The legislation doesn’t supply a black and white guide to what’s allowed and what’s not – much depends on the context of the gift. For example, a Christmas present to a client’s employee who is retiring may be perfectly okay, on the basis that the recipient is not in a position to behave improperly as a result of the gift. Similarly, a gift from a customer to a supplier in recognition of past activities could well pass the “smell test”, says PwC.
Subject to the above, PwC has offered the following classifications for your proposed present list:
Santa says you’ve been good this year:
- Mouse mats
- Drinks mats
- Company logo branded low cost merchandise (stress ball, umbrella, sports bags etc)
- Invited to modest Christmas party or lunch
- Reasonable socialising such as UK sports events with the host present
Santa says you had better be careful:
- Any alcohol above a bottle of wine
- Overseas sporting events and entertainment
- Expensive gifts such as gold fountain pens
- Portable e-book reader
Santa says you’ve been bad this year:
- Lavish hamper
- Case of champagne
- Invitation to any sporting events where the host is not present
- Anything delivered to a home address
- Tablet computer
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I've been a journalist for four years, writing on a wide variety of topics from business and finance to travel, culture and celebrities. I began my career as an editorial assistant for Palladian Publications, a B2B publisher specialising in technical magazines for professionals in primary industries. I later moved into consumer magazines as a...