Client gifting for mid-market companies: the complete guide

Let's be honest: most client gifts are forgettable.

Generic hampers that sit unopened. Branded gifts that go straight in the bin. Gift cards that feel transactional. That's the reality of corporate gifting for most mid-market companies.

But here's the thing: when done thoughtfully, client gifting actually works. It strengthens relationships, improves retention, and makes you memorable in a sea of competitors doing the bare minimum.

The catch? Getting it right involves more than just ordering some nice stuff. You need to understand UK tax rules (spoiler: it's more nuanced than you think), navigate VAT, and figure out how to scale without drowning in admin.

That's what this guide is for.

Why client gifting actually matters

We're not going to tell you that sending a gift will magically transform your client relationships. It won't.

But regular, thoughtful gifts - sent at the right moments - do something important: they signal that you value the relationship beyond the contract.

The business case:

• Client retention: Companies with intentional client gifting programmes report higher retention rates. A well-timed gift can be the difference between renewal and "we're exploring other options."
   
• Referrals: Happy clients talk. Send memorable gifts, and you're more likely to get introductions and recommendations. It's not complicated.
   
• Standing out: Your competitors are probably sending generic stuff (or nothing at all). Do better, and you'll be remembered.

The key: Don't just gift because everyone else does. Gift with intention.

Types of client gifts (and when to send them)

Welcome gifts for new clients

When: Week one of the partnership.

Why it works: Sets the tone. Shows you're invested from day one, not just chasing the next invoice.

What to send:

• Welcome hampers with treats (but make sure they're good ones)

• High-quality branded items (think useful, not promotional tat)

• Gift with choice so they pick what they actually want

The last option solves a common problem: you don't know their preferences yet, and guessing wrong makes a bad first impression.

Thank you gifts

When: After milestones, renewals, or referrals.

Why it works: Genuine appreciation builds loyalty. Saying "cheers for that" with a thoughtful gift reinforces you're paying attention.

What to send:

• Curated gift boxes

• Experience vouchers (dining, activities, whatever fits)

• Something personal if you know their interests

Holiday and seasonal gifts

When: Christmas, end of year, cultural holidays.

Why it works: Timing. Everyone's gifting in December, so you need to stand out. Don't be another hamper in the pile.

What works:

• Premium food and drink (but avoid generic)

• Sustainable options (more on that in a sec)

• Gift with choice to avoid dietary/preference minefields

Milestone celebration gifts

When: Partnership anniversaries, their company milestones.

Why it works: Shows you're paying attention to their journey, not just your own.

What to send:

• Commemorative items

• Upgraded experiences

• Charitable donations in their name (if that aligns with their values)

What actually works: client gift ideas

Right, here's where it gets practical.

Based on data from thousands of client gifts sent through Huggg, here's what recipients actually appreciate:

Premium food & drink

• Artisan chocolate (Hotel Chocolat, Mademoiselle Macaron)

• Wine collections (Virgin Wines)

• Gourmet meal kits (Pasta Evangelists, FodaBox)

Experiences

• Restaurant vouchers

• Wellness experiences

• Activity vouchers

Practical luxury 

• High-quality desk accessories (YETI, Le Creuset)

• Premium stationery

• Tech accessories

The problem with traditional gifting

You pick something. You order it. You ship it. And then you find out they're vegan and you sent a meat hamper. Or they don't drink and you sent wine. Or they’re in the middle of moving house and you sent a massive corporate gift basket.

The gift with choice solution

Instead of guessing, you set a budget, curate a range that reflects your brand, and let recipients choose what they actually want.

Benefits:

• No unwanted gifts sitting in cupboards

• No awkward "what's your address?" conversations (they add it themselves)

• Higher satisfaction because people get what they want

• You still control the budget and curation

See how ‘gift with choice’ works

Are client gifts tax deductible? (UK rules, explained simply)

Short answer: Generally no, but there are specific exceptions.

Longer answer: According to HMRC's official guidance, business gifts are treated the same as entertainment expenses and aren't normally tax deductible. But there are three key exceptions worth knowing about.

Exception 1: branded promotional gifts (the £50 rule)

Gifts up to £50 per person per year ARE tax deductible IF they meet these conditions:

• MUST include a conspicuous advertisement for your business (your company name or logo clearly displayed)
• MUST be under £50 per person per year (if you exceed £50, you lose the deduction on the entire amount, not just the excess)
• CANNOT be food, drink, tobacco, or exchangeable vouchers

What qualifies:

• Branded umbrellas

• Laptop cases with your logo

• Diaries and calendars

• Coffee mugs

• Water bottles

• Desk accessories

What doesn't qualify under this rule:

• Gift hampers (food and drink)

• Wine or alcohol

• Restaurant vouchers

• Any gift without your branding

Exception 2: gifts as part of a sale (fully deductible)

Here's where it gets interesting. If a "gift" is actually part of a sale transaction, it's fully tax deductible with NO cost restrictions and NO rules against food or drink.

Examples that qualify:

• Offering a bottle of wine when customers spend over £500

• Free product samples with purchase

• Complimentary items included with a service contract

• Welcome gifts for new customers who've signed a contract

Why it works: HMRC treats these as discounts on the sale, not as gifts. A bunch of flowers given with a new car purchase is effectively part of the car price—the customer has paid for it as part of the transaction.

This is the most flexible option for client gifting from a tax perspective.

Exception 3: free samples and stock gifts

Products you'd normally give away as free samples or general advertising materials are tax deductible, regardless of whether they include your branding.

What about gift with choice?

Here's where it gets nuanced.

When using platforms like Huggg's gift with choice, the tax treatment depends on the context:

• If sent as part of a sale (welcome gift for new client, reward for hitting contract milestones): Likely fully deductible as part of the sale transaction

• If sent as a standalone gesture (Christmas gift, "just because"): Only deductible if under £50 AND you're providing branded items

• If recipients choose food, drink, or vouchers: May not qualify for the £50 branded gift relief

The key question: Is the gift connected to a sale or contract? If yes, you're on stronger ground for full deductibility.

The bottom line on tax relief

For maximum tax efficiency with client gifting:

1. Best option: Structure gifts as part of a sale or contract (fully deductible, no restrictions)

2. Second best: Branded promotional gifts under £50 (avoid food, drink, vouchers)

3. Least tax-efficient: Standalone gifts without branding or over £50 (not deductible)

A £5,000 spend on tax-deductible gifts could reduce your corporation tax by up to £1,250 at current rates. That's worth getting right.

Always consult your accountant for advice specific to your situation. We're good at gifting, not tax law.

VAT on client gifts: the rules you need to know

Let's talk VAT. (We know, riveting stuff. But it matters.)

The VAT treatment depends on the type of gift

According to HMRC rules, how VAT applies to client gifts depends on whether they qualify for the business gift exemptions mentioned above.

Qualifying business gifts (under £50 with branding)

For gifts that meet the £50 branded gift criteria:

• You can reclaim input VAT on your purchase

• No output VAT is due (the gift itself isn't treated as a supply)

• The £50 limit applies per person per year

Non-qualifying gifts (over £50 or not meeting criteria)

For gifts that don't meet the tax-deductible criteria:

• Treated as a supply for VAT purposes

• You must account for output VAT on the cost

• Standard VAT rules apply

Gifts as part of a sale

When gifts are provided as part of a sale transaction (the tax-efficient option we discussed):

• VAT applies to the full transaction value as normal

• No special gift treatment needed

• Simplest approach for VAT purposes

VAT on different gift types

Food and drink hampers: Generally standard-rated at 20% (though some items may be zero-rated)

Branded merchandise: Usually standard-rated at 20%

Experience vouchers: Depends on the underlying service (check with your accountant)

VAT on client gift services

When using a platform like Huggg:

• VAT is charged on the service fee

• The platform handles VAT reporting on individual gifts

• You receive proper VAT receipts for your records

• Significantly reduces admin burden vs. managing multiple suppliers

Pro tip: Using a digital gifting platform simplifies both tax deductibility tracking AND VAT administration. Huggg's platform provides detailed VAT receipts and reporting, making tax filing less painful.

Important: VAT rules can be complex, and treatment varies based on the specific circumstances. Always consult your accountant for advice on your particular situation.

Learn more

Automated client gifts: scale without the nightmare

Here's the problem with manual client gifting:

You're sourcing gifts. Chasing addresses. Tracking orders. Missing anniversaries because someone forgot to update the spreadsheet. It's time-consuming, inconsistent, and impossible to scale.

That's why automated client gifts exist.

What automation actually means

Set it and forget it

• Schedule gifts for specific dates (renewals, anniversaries, holidays)

• Trigger gifts based on milestones (new client, referral received)

• Never miss an important moment

No address collection

• Send gifts via email or link

• Recipients add their own delivery details

• No awkward conversations

Bulk sending

• Send to 1 client or 100 at once

• Personalised messages for each recipient

• CSV upload for easy scaling

Complete visibility

• Track who received gifts

• Monitor redemption rates

• Measure ROI with proper analytics

Budget control

• Set spending limits per gift

• Allocate budgets across teams

• Real-time reporting

Right, here's where we talk about Huggg. But let's be clear: gifting alone won't save a terrible client relationship or fix poor service delivery.

That said, when you're already doing good work, automated gifting reinforces it. It makes consistency easy, removes the admin burden, and ensures no one slips through the cracks.

Discover automated gifting with Huggg

Client gifting best practices

1. Personalisation without the manual work

DON'T: Send the same hamper to everyone.

DO: Use gift with choice so recipients select what suits them.

Why it works: You get the benefits of personalisation without needing to know everyone's coffee preferences.

2. Time it right

Strategic moments:

• Week 1: Welcome new clients

• Month 3: Post-onboarding check-in

• Month 12: Partnership anniversary

• After wins: Major milestones, renewals, referrals

• Seasonally: End of year, cultural holidays

Don't just gift randomly. Be intentional about timing.

3. Consider cultural sensitivity

Be aware of:

• Dietary restrictions (alcohol, meat, allergens)

• Cultural holidays and traditions

• Regional preferences

• Corporate gifting policies (some clients can't accept certain gifts)

Gift with choice solves most of this - recipients select appropriate options for them.

4. Don't forget compliance

Check:

• Client's corporate gifting policy (many have strict limits)

• Anti-bribery regulations (avoid anything that looks like an inducement)

• Industry-specific rules (finance and healthcare are particularly strict)

Safe approach: Keep gifts modest, transparent, and clearly promotional.

5. Track and measure

Key metrics:

• Gift redemption rate (target: 80%+)

• Time to claim (faster = more engaged)

• Client feedback

• Impact on retention and referrals

Huggg's platform provides detailed reporting so you can actually prove ROI, not just guess.

Learn about Huggg

Building a scalable client gifting programme

Step 1: Define your atrategy

Questions to answer:

• Who gets gifts? (All clients? VIP only? Specific industries?)

• When do we gift? (What triggers a gift?)

• What's our budget per gift?

• Who owns the process? (Sales? Marketing? Customer Success?)

Don't skip this. A strategy stops gifting from being ad hoc and makes it intentional.

Step 2: Set your budget

OPTION A: Per client-budget

• VIP clients: £50-100 per gift

• Standard clients: £25-50 per gift

• New clients: £30-40 welcome gift

OPTION B: Annual budget

• Calculate: (# clients) × (gifts per year) × (average gift value)

• Example: 100 clients × 2 gifts/year × £40 = £8,000 annual budget

Step 3: Choose your approach

Fixed gifts

• Pros: Brand control, curated experience

• Cons: Risk of unwanted gifts, need addresses, higher admin

Gift with choice

• Pros: Higher satisfaction, no addresses needed, scales easily

• Cons: Less control over exact item (though you control the curation)

Recommendation: For mid-market companies, gift with choice offers the best balance.

See how it works 

Step 4: Automate the workflows

What to automate:

• New client welcome sequence

• Renewal anniversary gifts

• Referral thank-you gifts

• Quarterly check-ins for VIPs

• Holiday/seasonal campaigns

Integration options:

• CRM triggers (Salesforce, HubSpot)

• API automation

• CSV bulk uploads

• Manual sending when needed

Step 5: Measure and optimise

Track these metrics:

• Redemption rate (aim for 80%+)

• Client feedback scores

• Retention rate (gifted vs. non-gifted clients)

• Referral rate (gifted vs. non-gifted clients)

• Cost per gift vs. client lifetime value

Quarterly review:

• Which gifts perform best?

• What timing works?

• Are we hitting budget?

• What's the ROI?

Common client gifting mistakes

Mistake #1: Generic hampers

THE PROBLEM: Generic hampers often contain stuff recipients don't want. Alcohol for non-drinkers. Food with allergens. Random branded items.

THE FIX: Use gift with choice. Problem solved.

Mistake #2: Ignoring tax and VAT rules

THE PROBLEM: Assuming all gifts under £50 are tax deductible, or missing the opportunity to structure gifts as part of sales.

THE FIX: Understand the three tax-deductible options: (1) Branded gifts under £50 (no food/drink/vouchers), (2) Gifts as part of a sale (best option - fully deductible), or (3) Free samples. Use a platform that provides proper VAT receipts and documentation.

Mistake #3: One and done

THE PROBLEM: Sending one gift and never following up.

THE FIX: Build a systematic programme with regular touchpoints throughout the year.

Mistake #4: The address collection nightmare

THE PROBLEM: Chasing clients for delivery addresses. Dealing with incorrect addresses. Managing spreadsheets of doom.

THE FIX: Use a platform where recipients add their own addresses. No collection needed.

Mistake #5: One-size-fits-all

THE PROBLEM: Sending identical gifts regardless of relationship stage, preferences, or cultural considerations.

THE FIX: Segment your approach. VIPs get different treatment than standard clients. And let recipients choose when possible.

Should you use a client gift service?

Let's break this down.

DIY client gifting

PROS:

• Full control over specific items

• Potentially lower cost per gift (if buying in bulk)

CONS:

• Massive time investment (sourcing, ordering, shipping)

• Need to collect addresses

• No automation

• Manual tracking

• VAT and tax admin burden

Using a client gift service, like Huggg

PROS:

• No address collection (recipients add their own)

• Automated sending and scheduling

• Built-in gift with choice

• Proper VAT receipts and reporting

• Scales effortlessly (1 client or 1,000)

• Track redemptions and measure ROI

CONS:

• Platform fee for some features (though time saved usually outweighs this)

Our take: If you're gifting more than 20 clients per year, a service saves significant time and ensures consistency. The automation and tracking features alone justify the investment.

See our pricing

FAQ: client gifting questions answered

Are client gifts tax deductible in the UK?

Generally no, but there are exceptions. Branded promotional gifts (with your logo clearly displayed) up to £50 per person per year are tax deductible, but they cannot be food, drink, tobacco, or exchangeable vouchers. The best option: structure gifts as part of a sale or contract - these are fully tax deductible with no restrictions. Always consult your accountant for specific advice. 

What's the VAT rule for gifts to clients?

For qualifying business gifts (under £50 with branding), you can reclaim input VAT and no output VAT is due. For non-qualifying gifts, you must account for output VAT. Gifts given as part of a sale follow normal VAT rules for that transaction. Always check with your accountant for your specific situation.

Are gifts over £50 tax deductible?

Only if they're part of a sale transaction. Standalone gifts over £50 are not tax deductible, even if branded. Important: if a branded gift exceeds £50, HMRC disallows the entire amount, not just the excess. However, gifts provided as part of a sale (e.g., when a client purchases your services) are fully deductible regardless of value.

What are the best client gift ideas?

Gift with choice (recipients select what they want), premium food and drink, experience gifts, and practical luxury items. The key is personalisation - avoid generic hampers that might not suit everyone.

How do automated client gifts work?

You set up automated workflows that trigger gifts based on specific events (new client, renewal, referral). Using a platform like Huggg, you schedule gifts, send via email (no addresses needed), and track redemptions automatically.

Can I send gifts without knowing their address?

Yes. Modern platforms like Huggg let you send gifts via email or link. Recipients add their own delivery address. No awkward collection process needed.

What's better: hampers or gift with choice?

Gift with choice is generally better because recipients select what they actually want, there's no waste, it respects dietary restrictions and preferences, and you don't need addresses upfront.

How do I track client gifting ROI?

Track redemption rates, client feedback, retention rates (gifted vs. non-gifted), referral rates, and cost per gift vs. client lifetime value. Platforms like Huggg provide detailed analytics to measure impact.

What if my client's company doesn't allow gifts?

Some companies (especially in regulated industries) have strict policies. Always check before sending. If in doubt, ask. Or send something clearly promotional and under their threshold.

Should I brand client gifts?

For tax deductibility, yes - gifts should carry your company's advertisement. But don't overdo it. High-quality branded items work. Cheap promotional tat doesn't.

The bottom line

Client gifting doesn't have to be complicated.

Understand the rules (branded gifts under £50 can be tax deductible, but gifts as part of a sale are your best option for full tax relief). Choose the right approach (gift with choice over generic hampers). Leverage automation so you're not drowning in admin.

Most importantly: be intentional. Don't gift because everyone else does. Gift because it strengthens relationships, shows appreciation, and makes you memorable.

Ready to make client gifting actually work?

Learn more about client gifting with Huggg

About Huggg:

Huggg is a business gifting platform designed for mid-market companies. Send thoughtful gifts to clients and employees without collecting addresses, with full automation, proper VAT receipts, and gift with choice options.

Trusted by over 1,600 UK companies including GoCardless, Octopus Energy, and Starbucks.

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