Corporation Tax Act 2009 section 1299

Business entertainment: exceptions

Section 1299 sets out two exceptions to the general rule in section 1298 that prevents companies from deducting expenses incurred on business entertainment.

• The general prohibition on deducting business entertainment costs does not apply where either of two specific exceptions (Case A or Case B) is met.
• Case A applies where the company is in the business of providing entertainment and the entertainment is provided in the ordinary course of that business, either for payment or free of charge to advertise to the public generally.
• Case B applies where the entertainment is provided for the company's own employees, provided it is not merely incidental to entertainment being provided for non-employees.
• If entertainment is provided for both employees and others, and the employee element is only incidental to the provision for others, the employee entertainment exception does not apply.