Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Thu, 26 Jan 2023 12:22:16 GMT by
I'm a sole trader. Can I record stock purchased with non-cash gift cards as an expense if the gift cards were gifted to me?
Posted Fri, 27 Jan 2023 16:03:58 GMT by HMRC Admin 20
Hi lulb,

No. There hasnt been any expense as the gift card has covered the cost of the item. only if there was a balance to pay then you can claim that.

Thank you
Posted Fri, 27 Jan 2023 18:05:11 GMT by
Ok thank you. So just to clarify, this contradictory answer I found on the internet is false? "You can deduct any expenses that are ordinary and necessary for the business. The source of the money is not relevant. The gifted money was your money, the same as the cash in your wallet, the funds in your bank account or the credit limit on your credit card. "
Posted Tue, 31 Jan 2023 15:57:51 GMT by HMRC Admin 19
Hi,

Your stock needs to be purchased by the business to qualify for the business expense. Stock purchased with a gift card, is not stock purchased by the business.
 Where the cost of the stock exceeds the money from the gift card, then the difference can by claimed by the business.

Thank you.
Posted Wed, 07 Feb 2024 17:11:26 GMT by
Hi, If the company buys the gift cards and use them to purchase the stock? I’m asking because there are many sites where you can buy gift cards and get a discount 4-7%, thereafter use the gift cards to buy the product your business requires. In this case - is it fine to claim the product as an expense ? (Assuming we add the gift cards invoices as well to the records)
Posted Tue, 13 Feb 2024 12:26:01 GMT by HMRC Admin 5
Hi AdVantage Tech

The stock is an allowable expense providing it meets the 'wholly & exclusively' rules, however, if you used discounted gift cards to purchase the stock, you can only claim up to the amount actually incurred for the gift cards.  
For example, if you buy a £100 gift card and it costs the business £95 due to the discount, then you purchase an item of stock for £100, you can only claim £95 as an allowable expense.
Take a look at BIM37007 - Wholly and exclusively: overview - HMRC internal manual - GOV.UK (www.gov.uk)

Thank you

You must be signed in to post in this forum.