Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Business Income Manual

HM Revenue & Customs
, see all updates

Specific deductions: entertainment: introduction and contents

S45 Income Tax (Trading and Other Income) Act 2005, S1298 Corporation Tax Act 2009


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.

Further guidance can be found as follows:

  • property businesses (see PIM2064)
  • investment companies (see CTM08430)
  • capital allowances (see CA27200)
  • expenditure within the corporate intangibles regime (see CIRD12580)

The guidance on business entertainment expenditure is arranged as follows:

  1. BIM45005
  2. BIM45010
    What is business entertainment?
  3. BIM45011
    Meaning of business entertainment: judicial guidance
  4. BIM45012
    Meaning of business entertainment: hospitality provided free of charge
  5. BIM45013
    Meaning of business entertainment: contractual obligation
  6. BIM45014
    Meaning of business entertainment: no hospitality if sufficient ‘quid pro quo'
  7. BIM45020
    Expenditure which is not allowable
  8. BIM45025
    Travelling costs
  9. BIM45030
    Exceptions: provided in the normal course of trade for payment
  10. BIM45031
    Exceptions: normal course of trade for payment: judicial guidance
  11. BIM45032
    Exceptions: normal course of trade for purpose of advertising to the public
  12. BIM45033
    Exceptions: entertainment of employees
  13. BIM45034
    Exceptions: entertainment of employees: meaning of incidental
  14. BIM45040
    Entertaining by employees
  15. BIM45045
    Meals provided for non-employees
  16. BIM45046
    Accommodation provided for non-employees
  17. BIM45047
    Training courses
  18. BIM45050
    Promotional events
  19. BIM45055
  20. BIM45060
    Expenditure paid to specialist providers: entertainment providers
  21. BIM45061
    Expenditure paid to specialist providers: mixed services
  22. BIM45062
    Expenditure paid to specialist providers: example
  23. BIM45065
    Gifts: overview
  24. BIM45070
    Gifts: exceptions: small gifts
  25. BIM45071
    Gifts: exceptions: free samples
  26. BIM45072
    Gifts: exceptions: gifts to charities
  27. BIM45074
    Gifts: exceptions: gifts to employees
  28. BIM45075
  29. BIM45080
    Sales incentive schemes
  30. BIM45085
    Sales promotion schemes
  31. BIM45090
    Prizes and incentives: tax treatment of recipient