Business Entertainment Expenses for Tax deduction – First part

Business Entertainment Expenses for Tax deduction – First part

BIM45000 – Specific deductions: entertainment: introduction: contents

S45 Income Tax (Trading and Other Income) Act 2005, S1298 Corporation Tax Act 2009

Overview

With certain exceptions, expenditure on business entertainment or gifts is not allowable as a deduction against profits, even if it is a genuine expense of the trade or business. This includes expenditure by:

  • individuals, partnerships and companies carrying on a trade, profession or vocation
  • individuals, partnerships and companies carrying on a property business
  • investment companies
  • employees and directors (in certain circumstances)
  • any other person who carries on a trade or business

Assets used for the purpose of business entertainment do not qualify for capital allowances.

  • Further guidance can be found as follows:
  • property businesses (see PIM2064)
  • investment companies (see CTM08430)
  • capital allowances (see CA27200)
  • expenditure within the corporate intangibles regime (see CIRD12580)

The guidance on business entertainment expenditure is arranged as follows:

BIM45005 History

BIM45010 What is business entertainment?

BIM45011 Meaning of business entertainment: judicial guidance

BIM45012 Meaning of business entertainment: hospitality provided free of charge

BIM45013 Meaning of business entertainment: contractual obligation

BIM45014 Meaning of business entertainment: no hospitality if sufficient ‘quid pro quo’

BIM45020 Expenditure which is not allowable

BIM45025 Travelling costs

BIM45030 Exceptions: provided in the normal course of trade for payment

BIM45031 Exceptions: normal course of trade for payment: judicial guidance

BIM45032 Exceptions: normal course of trade for purpose of advertising to the public

BIM45033 Exceptions: entertainment of employees

BIM45034 Exceptions: entertainment of employees: meaning of incidental

BIM45040 Entertaining by employees

BIM45045 Meals provided for non-employees

BIM45046 Accommodation provided for non-employees

BIM45047 Training courses

BIM45050 Promotional events

BIM45055 Sponsorship

BIM45060 Expenditure paid to specialist providers: entertainment providers

BIM45061 Expenditure paid to specialist providers: mixed services

BIM45062 Expenditure paid to specialist providers: example

BIM45065 Gifts: overview

BIM45070 Gifts: exceptions: small gifts

BIM45071 Gifts: exceptions: free samples

BIM45072 Gifts: exceptions: gifts to charities

BIM45074 Gifts: exceptions: gifts to employees

BIM45075 Prizes

BIM45080 Sales incentive schemes

BIM45085 Sales promotion schemes

BIM45090 Prizes and incentives: tax treatment of recipient

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