Entertaining and gifts expenditure should always be analysed to ascertain the extent to which expenditure is allowable or disallowable. The tax computation should include clear descriptions and breakdowns of expenditure. This document discusses the tax treatment of business entertainment, incidental costs of entertainment, and gifts to employees and third party.

Points discussed within this guidance note:

> Entertainment

Expenditure on 'business entertainment' is specifically disallowed as a deduction from trading profits, unless the expenditure is made in the ordinary course of a business' trade of providing entertainment.

> Definition of ‘business entertainment’

This note considers HMRC rules on entertainment, business entertainment tax and how to ascertain what is allowable business entertainment.

> Employees

> Specialist providers

> Gifts

Tax on gifts to employees - Business gifts are generally disal-lowable under the same provisions as apply to business entertainment however expenditure on gifts should be allowable provided that it meets one of four criteria listed in this note.


To view the full guidance note register for a free trial or if you already have access to TolleyGuidance please use the 'login' button below:

Request a Free Trial to TolleyGuidance to gain access to the full article

TolleyGuidance is produced by specialists within the field, our tax guidance materials provide actionable insights and practical guidance to support you day-to-day. We don’t just inform you about the latest changes in the tax world. We take the time to explain the implications and, most importantly, what actions you need to take for your clients.


A bit about you:

Please note that all fields marked with a * must be filled in
Salutation
First name*
Last name*
Company*
Job title*
Email*
Phone*
Postcode