HMRC internal manual

Business Income Manual

Specific deductions: entertainment: introduction and contents

You should check the other guidance available on GOV.UK from HMRC as Brexit updates to those pages are being prioritised before manuals.

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