Entertainment

Contrary to widespread belief, the entertaining of customers by the self-employed and business in general is not an allowable expense that can be utilised to offset profit for the purposes of UK tax calculation. The exception, of course, is where entertainment is actually the trade of the business.

Employees also have to report and pay tax on amounts received for the purposes of customer entertainment and this will be carried out by the employer when they prepare the annual P11D for the employee.

There are limited reliefs available for an employer 'entertaining' their staff in certain circumstances (see also 'Trivial Benefits').