At this time of year you may think of giving gifts or bonuses to staff, or presents to clients, customers or useful contacts, but do remember that these may be subject to tax as follows:
Gifts to staff are taxable benefits.
A bonus is just an irregular payment of wages so must go through the payroll.
Gifts or Party costs for third parties e.g. spouses, clients, useful contacts, etc. all count as client entertaining in the company books, and are tax free for the recipient if under £250 pa (if over then 100% is taxable).
A business may make promotional gifts or donate prizes, up to £50 per recipient in any 12 month period and claim the VAT paid on purchase. But if this threshold is exceeded then Sales VAT must be accounted for on all such gifts.