Are there tax benefits to putting your party/event through your business?

tax_benefits

We get asked this a lot! Not only from corporate clients but from our private clients looking to entertain suppliers, clients or their team, perhaps even in their own homes. To surmise and not to make this more complicated than it needs to be, the answer is: yes, you can entertain all of the above and put it through your business if you are a limited company. However, it must be added back for corporation tax purposes. If you are a sole trader, entertainment costs are not allowed.

For limited companies, you can put it through as an expense. However when calculating the amount assessable to corporation tax, you cannot include it. Please see the example below:

PROFIT & LOSS ACCOUNT
Sales100
Expenses
Salaries50
Light & Heating20
Client Entertainment10
Profit20
Corporation Tax Workings
Profit Assessable20
Addback
Entertainment10
Pay Corporation Tax on:30

Whilst we are not chartered accountants, we would love the opportunity to help you with your party, budget for your next event and work with you. Please feel free to contact us by phone or email to schedule in an appointment online, on the phone or in person.