Here’s a short guide:
1. Client Hospitality and Entertainment:
Generally, costs incurred entertaining clients, including meals and events, are not deductible for Corporation Tax purposes. You still need to keep detailed records as these can affect VAT claims and other financial assessments.
2. Staff Parties and Events:
Costs of annual events – eg Christmas parties or summer gatherings – are exempt from reporting and paying tax and NI. That’s provided they’re open to all employees and cost no more than £150 per attendee per year.
3. Promotional Events:
Events promoting your business to the public can often include deductible expenses, eg free samples or demonstrations. The primary purpose has to be promoting your business rather than entertainment.
Key Points to Remember:
– documentation is crucial
– keep detailed records, incl. the purpose and who benefited
Know the Boundaries:
UK tax laws are specific about what qualifies as a deductible entertainment expense. Familiarise yourself with the rules or consult a tax professional.
Need further help?
We guide SMEs through the intricacies of tax deductions and financial planning, to ensure you take every opportunity to optimise your tax position.
Call us on 01284 834216
