Business entertaining and tax relief

Expenditure on business entertainment is not allowable as a deduction against profits. Nor may a deduction be made for any expenditure which is incidental to business entertainment.

The meaning of ‘incidental’ is not defined by HMRC but should be interpreted to mean any expenditure that is incurred directly or indirectly in connection with the provision of entertainment.

This might include payments to a third party for the organisation of entertainment or the costs of issuing invitations to customers. It will also include the cost of maintaining assets, such as yachts, which are used for business entertainment purposes.

Traders may obtain entertainment through barter arrangements in which their own goods or services are exchanged for hospitality. The amount to be disallowed is the larger of:

the value at which the transaction is recognised in the profit and loss account, and

the cost of the goods or services exchanged for business entertainment.

Share:

Share on facebook
Share on twitter
Share on pinterest
Share on linkedin
Accounting in Sheffield and Doncaster Certificates

Recently Added News

What is round the corner?

Having glimpsed the light at the end of the COVID tunnel, many of us will have everything crossed that progress towards normality will continue. The

Read More »

Related News

Tax Diary September/October 2021

1 September 2021 – Due date for Corporation Tax due for the year ended 30 November 2020. 19 September 2021 – PAYE and NIC deductions

Tax collection options

If you do not pay your tax bill on time and cannot make an alternative arrangement to pay, HMRC can take ‘enforcement action’ to recover

Furlough figures continue to fall

Almost three million people have moved off the furlough scheme since March as the economy began to bounce back and businesses reopened, according to new

Quick Links

Web + SEO - LoudCrowd