SE21835 - Benefits: third party entertainment: general

Section 141(6B), Section 142(3B) and Section 155(7) ICTA 1988

An employee or office holder is exempt from tax under Schedule E on certain goodwill entertainment, provided by third parties, for him or for a member of his family or household from 1987/88 onwards. Details are at SE21837.

The exemption applies to all employees whether or not they are directors or employees within Part V Chapter II ICTA 1988.

The exemption covers liability which could otherwise arise under the following provisions:

• Section 141 ICTA 1988 (non-cash vouchers, see SE16000 onwards)
• Section 142 ICTA 1988 (credit-tokens, see SE16090 onwards)
• Section 154 ICTA 1988 (benefits of directors and employees within Part V Chapter II ICTA 1988).

For the meaning of "family or household" see SE20504.

Before taking any steps to obtain tax where it is thought that liability on third party entertaining could arise under Section 19(1)1 ICTA 1988 or Section 153 ICTA 1988 make a report to Employment Income Technical.

See:

• SE21836 for the meaning of "entertainment".
• SE21838 for what to do about multi-purpose vouchers and credit tokens
• SE21839 for what to do when calculating whether an employee's emoluments are at a rate of £8,500 a year or more
• SE21840 for the interaction with the disallowance of entertaining expenditure under Section 577 ICTA 1988 when calculating the employer's taxable business profits