Income Tax (Trading and Other Income) Act 2005 section 45

Business entertainment and gifts: general rule

Section 45 sets out the general rule that expenses incurred on business entertainment and gifts are not allowable deductions when calculating trading profits.

  • No deduction is allowed for expenses on entertainment or gifts connected with a trade
  • Payments or allowances to employees are caught by this rule only if they are exclusively for meeting entertainment or gift expenses
  • Exceptions to the general rule exist for certain entertainment (section 46) and certain gifts (section 47)
  • "Entertainment" includes hospitality of any kind, and related incidental costs are also disallowed

Access full legislation.And much more.

By becoming a member, your team gets full access to Tax World research tools and source-backed tax resources.

Become a member