Income Tax (Earnings and Pensions) Act 2003 section 358

Business entertainment and gifts: other exceptions

Section 358 sets out the exceptions to the general rule in section 356 that prevents employees from deducting expenses related to business entertainment and gifts.

• Expenses for entertaining or giving gifts to the employer's own employees are deductible, unless the entertainment or gifts are also provided to non-employees and the provision for employees is merely incidental
• Expenses for gifts carrying a conspicuous advertisement for the employer (or a group company) are deductible, provided the gift is not food, drink, tobacco, or a voucher exchangeable for goods
• Even where a gift carries a conspicuous advertisement, the total cost of such gifts to the same person in the same tax year must not exceed £50
• Directors and persons engaged in managing a company are treated as employees for these purposes, and a "group" means a company and its 51% subsidiaries

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