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Tax expenses - entertaining clients?
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Old 22-04-2008, 2:23 PM
MoneySaving Convert
Join Date: Mar 2007
Posts: 47
Default Tax expenses - entertaining clients?

Hi all,

I'm self employed, and I received my tax return forms through recently.

One part says (on page SEFN 5) about business expenses, and says "Some expenses are not allowable for tax purposes, for example, entertaining clients, even if such entertainment directly led to new business".

I'm confused, i thought it was ok to take your clients out to lunch etc?

Theres a list of allowable expenses, and disallowable ones. Entertaing appears in the disallowable one.

Can someone please enlighten me, as nearly every self-employed/small business owner has told me that it's ok to do this now and again.


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Old 22-04-2008, 3:09 PM
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Entertainment expenses are not allowable for businesses and must be added back in income tax returns. Your friends may well put this expense through their accounts, but if they looked at the tax computations they should find them disallowed.
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# 3
Old 22-04-2008, 3:25 PM
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Join Date: Apr 2005
Posts: 19

While taking potential customers or suppliers out for lunch may be necessary for you to win new sales etc, tax law says such expenses are disallowable. You can claim deductions for entertaining employees, but you need to be careful that they are not personally taxed on these costs.
Here's a list of some common tax deductions (where I got the above quote from), but also check the HMRC website as they have some good info on there.
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