BIM51405 - Breweries: What are allowable deductions?

Allowable Expenses:

Where an attempt is made to enhance permanently the sales potential of retail outlets, for example, by securing a relaxation of the licensing laws, then, exceptionally, a deduction may be allowable if the expenditure forms part of a continuous campaign to promote trade. (See Cooper v Rhymney Breweries Ltd [1965] 42TC509).

Non allowable Expenses

No deduction is to be allowed in respect of-

• expenses of applications (whether successful or not) for the removal of existing licences, including payments for `call of licence' or payments of compensation to tenants of tied houses ( Southwell v Savill Bros Ltd [1901] 4TC430; Morse v Stedeford [1934] 18TC457; Pendleton v Mitchells & Butler Ltd [1968] 45TC341).
• payments to Guarantee Fund Trustees.

As regards legal etc expenses of applications for licences for licensed houses, see BIM61405.