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 ITTOIA05/S45 for individuals and partnerships and CTA09/S1298 for corporate entities. 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:
History |
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What is business entertainment? |
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Meaning of business entertainment: judicial guidance |
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Meaning of business entertainment: hospitality provided free of charge |
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Meaning of business entertainment: contractual obligation |
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Meaning of business entertainment: no hospitality if sufficient ‘quid pro quo' |
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Expenditure which is not allowable |
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Travelling costs |
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Exceptions: provided in the normal course of trade for payment |
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Exceptions: normal course of trade for payment: judicial guidance |
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Exceptions: normal course of trade for purpose of advertising to the public |
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Exceptions: entertainment of employees |
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Exceptions: entertainment of employees: meaning of incidental |
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Entertaining by employees |
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Meals provided for non-employees |
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Accommodation provided for non-employees |
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Training courses |
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Promotional events |
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Sponsorship |
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Expenditure paid to specialist providers: entertainment providers |
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Expenditure paid to specialist providers: mixed services |
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Expenditure paid to specialist providers: example |
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Gifts: overview |
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Gifts: exceptions: small gifts |
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Gifts: exceptions: free samples |
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Gifts: exceptions: gifts to charities |
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Prizes |
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Sales incentive schemes |
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Sales promotion schemes |
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Prizes and incentives: tax treatment of recipient |
