The holiday season is a great time of the year for business owners to express their appreciation for their employees, their customers, and even their vendors / suppliers. Holiday gift-giving doesn’t have to be complicated or expensive — in fact, with a little creativity and planning, small business owners can give thoughtful gifts, which can help cultivate stronger business relationships and can also be financially beneficial! Here are a couple ideas that won’t have you breaking the bank and can benefit your company during tax season:
● Offer a deal
A successful holiday sales season depends on early planning and consistent marketing, especially if you’re a small business competing against retail giants. The holiday season is a great time to offer an exclusive deal to your customers and clients who have supported you throughout the year. You can easily create and customize coupons on your Shop Small Biz Listing. Don’t forget to use social media tools like Facebook, Twitter, and Instagram to promote your deal.
When giving gifts to clients, suppliers, or vendors, remember that you can deduct all reasonable business expenses from your business income on your tax return. According to the CRA, if you give a client a gift certificate to a restaurant or a pair of tickets to a hockey game, those gifts are considered to be “meals and entertainment expenses”; as a result, you may write-off half of their value.
In addition to giving gifts to clients, you may occasionally want to give gifts to your employees. The CRA allows business owners to give gifts to employees as long as it is a special occasion, such as a holiday or a birthday, and it also allows business owners to give awards to employees (these can also be deducted as business expense). For more information, please visit “Rules for gifts and awards” from CRA website.
● Charitable donations
Driving out to the store, wandering the aisles for just the right gift, driving back home, forgetting the wrapping paper, driving back to the store, finding other things you might like to buy for yourself… it all adds up to a lot of time and money spent! So, in lieu of a gift, some business owners choose to make a charitable donation in a person’s name. This is a great option that allows you to give someone a gift, and also goes towards helping a worthy cause — there is a charity for pretty much everything. As a business owner, a charitable donation will allow you to claim a tax credit when you file your income tax return. Because this falls under charitable donations rather than gift-giving, the full amount of the donation is tax-deductible, up to 75 per cent of your net income (see here for more information).
● Go for dinner
Nothing says ‘thank you’ like a meal. Why not take your employees and/or clients out for dinner? It’s a great way to spend some time in a more casual atmosphere and gives you an opportunity to get to know the people you work with outside of the working environment. It can help foster relationships, and can even be claimed as a business expense – a happy end of the year for everybody!