Rebecca Benneyworth looks at ancillary costs of business entertainment, are they all disallowable?
When a company incurs entertaining expenditure what are the tax rules? Most people understand that client and customer entertaining is not allowed as a business deduction, but what about related expenditure such as travel, and what about staff entertaining, and those employees of your sister company? Does it make any difference if you split the bill?
Customers, clients and suppliers
This category includes any non staff related entertaining. Business entertaining is excluded from deduction from profits by Section 577 TA (and now also S45 ITTOIA) . This excludes deduction for business entertaining, which is defined as including hospitality of any kind, provided by the company or an e...