Section 46 Business entertainment: exceptions

(1) The prohibition in section 45 on deducting expenses incurred in providing entertainment does not apply in either of cases A and B.

(2) Case A is where—

(a) the entertainment is of a kind which it is the trader’s trade to provide, and

(b) the entertainment is provided in the ordinary course of the trade either for payment or free of charge in order to advertise to the public generally.

(3) Case B is where the entertainment is provided for employees of the trader unless—

(a) the entertainment is also provided for others, and

(b) the provision of the entertainment for the employees is incidental to its provision for the others.