BIM45000 - Specific deductions: entertainment: introduction and contents

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.

The legislation is at ICTA88/S577. Further guidance can be found as follows:

• property businesses - PIM2000 onwards,
• investment companies CTM08430,
• capital allowances CA27200,
• expenditure within the corporate intangibles regime CIRD12580.

The guidance on business entertainment expenditure is arranged as follows: