Corporation Tax Act 2009 section 1298

Business entertainment and gifts

Section 1298 sets out the general rule that companies cannot deduct expenses incurred on business entertainment or gifts when calculating their taxable profits.

• Expenses on business entertainment or gifts are generally not deductible for corporation tax purposes, whether as trading expenses, investment management expenses, or BLAGAB management expenses
• The disallowance extends to sums paid to or put at the disposal of employees specifically to meet entertainment or gift expenses on the company's behalf
• "Entertainment" is broadly defined to include hospitality of any kind, and "employee" includes directors and anyone engaged in managing the company
• Exceptions to the general disallowance exist for certain types of entertainment (section 1299) and certain types of gifts (section 1300)