Particular benefits: third party entertainment: interaction with section 356 ITEPA 2003: liaison with accounts office
Section 356 ITEPA 2003
Section 356 ITEPA 2003 prohibits a deduction for most business entertaining in calculating business profits (see generally BIM45000 onwards). Business entertaining is defined as “entertainment (including hospitality of any kind)” - the same words used in the employment income exemption. Thus it’s likely that in most cases where an employee is entitled to exemption in respect of entertainment provided by a third party, the provider will not be able to deduct the cost of that entertainment in calculating his profits.