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HMRC internal manual

Business Income Manual

Specific deductions: guarantee payments: exhibitions

A payment to an exhibition guarantee fund made by an exhibitor will be an allowable deduction if it is incurred wholly and exclusively for the purposes of the guarantor’s trade. This was the case in Morley v Lawford and Company [1928] 14TC229 (see BIM37780), in which a firm of asphalters was guarantor to the Wembley exhibition and sought a deduction for the amount they were eventually called upon to pay. The firm became guarantors because they had been assured that they would be given preference in the allocation of contracts at the exhibition. In the event they were not given the opportunity to tender, but this was not relevant to their purpose for giving the guarantee, which was held to be wholly and exclusively for the purposes of their trade.