Section 358 | Business entertainment and gifts: other exceptions

(1)The prohibition in section 356 on deducting expenses does not apply if the expenses are incurred in providing entertainment or gifts for the employer’s employees unless—

(a)they are also provided for others, and

(b)their provision for the employees is incidental to their provision for the others.

(2)For this purpose directors and persons engaged in the management of a company are regarded as employed by it.

(3)The prohibition in section 356 on deducting expenses does not apply if the expenses are incurred in providing a gift which incorporates a conspicuous advertisement for the employer or, if the employer is a company, another company which belongs to the same group as the employer, unless—

(a)the gift is food, drink, tobacco or a token or voucher exchangeable for goods, or

(b)the cost of the gift to the donor, together with any other gifts (except food, drink, tobacco or tokens or vouchers exchangeable for goods) given to the same person in the same tax year, is more than £50.

(4)In subsection (3) “group” means a body corporate and its 51% subsidiaries.