Entertainment and its tax implications

Expense Type	VAT	Corporation Tax	Income Yax Benefit in Kind	Conclusion
Business entertainment – even a cup of coffee to a customer will be treated as business entertainment [3.5 Putting it through]	No1	No1	N/A	Pay via company, post in separate nominal head and disallow during CT600
Staff entertainment – current employees only, past or future employees or spouse make it business entertainment.	Yes	Yes	Chargeable except when covered by Trivial or Social function exemption rules	Pay via company, if covered by Bik exemption rules.
Personal entertainment	No	No	N/A	Avoid but if paid put is through Director Loan account
Subsistence – director and or employees, working away from main base. Genuine not business or staff entertainment.	Yes	Yes	N/A	Pay via company but see link

1. Business entertainment is beneficial to put through the company instead of paying from dividends. _{See example Simon on Putting it through pg 74.}

• Business entertainment is cheaper (taxwise) than staff entertainment where Bik implications see _{See example Marcus on Putting it through pg 78.}

Source:

1. Putting it through from Tax Cafe