Gifts given by businesses are treated generally in the same way as entertainment for tax purposes.
But some Gifts can become non-taxable to the recipient and tax deductible for the giver.
At BIM45065 HMRC confirm that the tax treatment of Gifts is substantially the same as Entertainment.
A gift is defined as:-
"something that is given to a person without receiving anything in exchange. It is offered voluntarily and without any expectation of a return"
However this definition does not preclude the following circumstance as an example:-
A gift made after an event, to a speaker for example, where the giver was under contractual liability to deliver a gift after an event.
This is because there is an obligation on the part of the giver to make the gift, and so the definition above does not apply.
Another example given by HMRC is
"A bunch of flowers presented to a customer who has just purchased a new car"
Which becomes tax deductible as a cost to the sale of the car.
If goods are given at a discount then the profit foregone by the giver is also not treated under the gift rules, as HMRC specifically confirm, "A trader may supply goods at a discount but, so long as the original cost has been covered, you should not treat the profit foregone as a business gift."
Branded Gifts
A gift that is branded with a conspicuous logo of the giver is tax deductible and not taxable on the recipient.
This is defined at BIM45070 but does not apply to Food, Alcohol, or Tobacco. The gift(s) also has to be valued at less than £50 per year per person.