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: