Referral fees and gifts, tax implications

N

netzero

Guest
Hi,

I am trying to offer an incentive for people to refer business to me. I have a number of businesses and individuals that refer clients to me. I would like to give them a percentage of the sale they referred to me. Can I just give them a cheque for the amount? Can I class this as a business expense? Is it more tax efficient to give them a gift or a payment?

I would also like to implement something similar with my customers. A refer a friend program. When they refer a certain number of friends to me, they get a payment or a gift. Again, could these payments or gifts be classed as business expenses?

Any help would be greatly appreciated as I cant seem to find any clear information on this.

Brian
 
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