BIM45000 - Specific deductions: entertainment: introduction and contents

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

Overview

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

   History
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

    Sponsorship
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

    Prizes
29. BIM45080

    Sales incentive schemes
30. BIM45085

    Sales promotion schemes
31. BIM45090

    Prizes and incentives: tax treatment of recipient