You cannot decide if an employee or office holder is entitled to
a deduction for entertainment expenses solely by reference to the
general rule for employees’ expenses in Section 336 ITEPA
2003 (see generally
EIM31620 onwards). You must first of all
decide if Section 356 ITEPA 2003 applies to prevent the employee
obtaining a deduction. Section 356 is concerned with the expenses
of 'business entertainment' (see
In general, Section 356 prevents any deduction for expenses incurred by an employee or office holder in providing entertainment, or a gift, in connection with the employer’s trade, business, profession or vocation. But the prohibition does not apply if:
The table in
EIM32566 sets out the steps to follow in
deciding if Section 356 applies. There is also a flowchart at
The table in EIM32570 shows how the detailed guidance is arranged.
As regards the exemption for goodwill entertainment provided for an employee or office holder by a third party, see EIM21835 onwards.