Business Entertianing

by **whatdoiknow** on Tue Jul 14, 2009 1:28 pm

Is there any limit as to what is allowed underbusiness entertaing?. I have searched as best as I can even the HM R&C site but cannot see any mention.

My specific query is can, what appears to be an all day drinking session between a couple of our employees and some of our customers, be allowed as business entertaining.

Thanks,

Martin

by **RAL** on Tue Jul 14, 2009 2:43 pm

AFAIK there is not limit as business entertainment is not allowable cost for tax purpose

by **whatdoiknow** on Tue Jul 14, 2009 3:21 pm

Thanks Ral,

Apologies for my spelling by the way, faulty keyboard.

So basically any of the p*ss artists that we employ that like to call themselves salesmen, can get together a couple of customers and down double vodkas all day.

Alright for some.
:shock:

Martin

by **whatdoiknow** on Tue Jul 14, 2009 3:51 pm

P.S.

The main reason I am asking is we didn't want HMR&C coming in and saying it is staff enertaining.

Martin

by **MrPAYE** on Wed Jul 15, 2009 1:24 pm

whatdoiknow wrote:P.S.

The main reason I am asking is we didn't want HMR&C coming in and saying it is staff enertaining.

Martin

The only way that would happen if the ratio of staff to clients was off, i.e. 10 staff to one client. If say, 2 or 3 staff to one client then it doesn't really matter whether they are down the pub, at the races etc.

by **Carolyn** on Mon Sep 21, 2009 9:42 pm

Can anyone point me to some information on the HMRC website (or elsewhere) which details the fact that customer entertainment is not deductible for corporation tax purposes? I have just read through their guidelines for filing company tax returns and the only thing they mention which differs from the accounts is depreciation/capital allowance. Also, is there any other business expenditure which is not deductible?

Thank you.

by **RAL** on Mon Sep 21, 2009 10:19 pm

It is here. http://www.hmrc.gov.uk/manuals/bimmanual/BIM45000.htm

by **Carolyn** on Tue Sep 22, 2009 5:14 pm

Thank you - they don't make these things easy to find do they? How would anyone know?

by **RAL** on Tue Sep 22, 2009 5:35 pm

Carolyn wrote:Thank you - they don't make these things easy to find do they? How would anyone know?

Hi Carolyn

I agree with you they do not make easy to find. The search on HMRC's website is not good.

Most tax advisers and accountant would have gone through the grill of studying at least 4 years, then getting experience, plus keeping up to date with the legislation changes by doing CPDs. So a good accountant/tax adviser would know these things.

The link I posted is manual used by HMRC's staff. Same manual also provides information how HMRC interprets taxes legislations.

I strongly recommend that you appoint an accountant or a tax adviser if you are unsure of dealing with Corporation Tax. The entertainment is well known issues within business taxation. There are more complex issues than entertainment.

If you are doing DIY you may claim something which you should not have and you may not claim which you are entitled to.

You also needs to do some other adjustment such as depreciation, capital allowances etc. If director’s account is overdrawn you have to deal with provision of S419 too.

If you need help contact me via email.

HTH