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S45 Income Tax (Trading and Other Income) Act 2005, S1298 Corporation Tax Act 2009

»Ê¹ÚÌåÓýapp provision of free or subsidised hospitality or entertainment

Business entertainment means the provision of free or subsidised hospitality or entertainment. »Ê¹ÚÌåÓýapp person being entertained may be a customer, a potential customer or any other person.

»Ê¹ÚÌåÓýapp legislation defines entertainment as ‘includes hospitality of any kindâ€� but does not provide any further meaning for ‘entertainmentâ€� or ‘hospitalityâ€�.

»Ê¹ÚÌåÓýapp Shorter Oxford English Dictionary defines hospitality as ‘the art or practice of being hospitable; the reception and entertainment of guests with liberality and goodwillâ€�. Whilst the case of Bentleys, Stokes and Lowless v Beeson [1952] 33 TC 491 has been superseded by the introduction of the legislation specifically denying a deduction from trading profits for expenditure of business entertaining and gifts, the discussion of the meaning of ‘entertainmentâ€� and ‘hospitalityâ€� is still useful. Roxburgh J said at page 498:

‘I cannot myself see much difference between entertainment and hospitality, and if once hospitality arises then the relationship of host and guest follows as a matter of course.�

This idea of the host/guest relationship is fundamental to the meaning of business entertainment.

Over the years, the meaning of business entertainment has been refined. This is discussed further in BIM45011 - BIM45014.