BIM45050 - Specific deductions: entertainment: promotional events
S45 Income Tax (Trading and Other Income) Act 2005, S1298 Corporation Tax Act 2009
Allow publicity costs
Promotional events arranged for the purpose of publicising a trader’s products are not in themselves business entertainment but the cost of any food, drink or other hospitality provided as part of the event is disallowable under the legislation. It is often the case that publicity for the trader’s products is just one part of an event designed to provide hospitality for customers, journalists, and so on. In this event, the expenditure, except the direct cost of publicising the products, is disallowable under the legislation.
An example of allowable expenditure is an event arranged by a car manufacturer to allow potential customers to test drive new cars. However, if the manufacturer arranges a golf day at which test drives are available then only the direct costs of the test drives and of any publicity material provided are not disallowed by the legislation.
Similarly, the costs of a book launch at which food and wine are provided and where the author and invited guests are entertained together with journalists and booksellers is disallowable under the legislation. However, where any hospitality provided is minimal no disallowance need be made.