Entertainment ― clients

Produced by a Tolley Employment Tax expert

Employment Tax

Guidance

Introduction

Employers may regularly entertain clients, customers or suppliers. The consequences of such entertainment for both the third parties and any employees of the company are considered within this guidance note.

Entertainment means any provision of hospitality.

HMRC guidance is from EIM32565CT.

Client entertaining

When are the costs of client entertaining deductible for tax and NIC?

Client entertaining is charged as a benefit on employees unless the following applies:

•
the deduction is disallowed in calculating the employer’s profits from the trade, profession or vocation (eg it can’t be deducted in the employer’s corporate tax return), or
•
the deduction is disallowed in calculating the employer’s expenses of management or similar, such expenses then being deducted in the employer’s profits from trade, or
•
the deduction is disallowed in calculating the employer’s relevant shipping profits where that employer Is a tonnage tax company

ITEPA 2003, s 357

In summary, therefore, client entertaining can either be deducted by the employer

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Owner-Managed Businesses

Wholly and exclusively

Wholly and exclusivelyFor both income tax and corporation tax purposes, one of the fundamental conditions that must be satisfied for an item of expenditure to be deductible, is that it must incurred ‘wholly and exclusively’ for the purposes of the trade, profession or vocation. References to CTA

14 Jul 2020 14:00 | Produced by Tolley Read more

Owner-Managed Businesses

Definition of a close company

Definition of a close companyThe detailed definition of a close company is set out below, but in summary the rules are targeted at those companies where the owners can manipulate the activities of the company to influence their own tax position. Therefore, broadly speaking, in most cases an

14 Jul 2020 11:24 | Produced by Tolley Read more

Personal Tax

Interest and penalties on late paid tax under self assessment

Interest and penalties on late paid tax under self assessmentInterestIf the capital gains tax, the balancing payment or payments on account of tax and / or Class 4 national insurance contributions (NIC) are paid late, HMRC will charge interest on the amount overdue from the original due date. The

14 Jul 2020 12:00 | Produced by Tolley Read more

��Ƶ