Trade Association Dinner

Trade Association Dinner

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I have a difference of opinion with a client.  He is a sole trader and went to his trade association national dinner, he felt he had to because he in on the committee and knew that it would be good networking.  He also took his wife, which to me makes a big difference to the tax treatment.

As a sole trader he doesn't get the 'Christmas party' allowance so cannot claim a deduction for the cost of his wife, that seems to me to be a given and I take the view that as two tickets were included on one invoice that means both are disallowable.  However he is strenuous in his argument that he was not 'entertaining' so the cost of his own ticket should be deductible for both VAT and income tax.  The VAT guidance in 700/65 Para 2.2 seems unequivocal and the guidance at BIM 45000 gives me no reason why income tax relief should be given for any of this cost.

However I wonder what other (unincorporated, probably sole practitioner) Aweb members do when they go to their own professional body dinners, either local or national?  If they buy a single ticket would they claim it as an income tax deduction, where is the line between what is an essential business expense (wholly and exclusively) and one that is more of a social occasion?  I accept that if you take non-members of staff that would be entertaining.

Thanks

Tim

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By Xi Ng
27th Apr 2015 10:49

Entertaining does not come into it

It is not wholly and exclusively for the purposes of the business. Unless, of course, he and his wife ate before they went?

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