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Entertainment Expenses

Jingle bells, mistletoe and mince pies… Christmas is just around the corner, and at this time of year we are often asked for clarification around the rules on entertainment. 

Entertainment is generally 50% deductible for tax purposes and falls under four main areas:

  • Corporate boxes 
  • Holiday accommodation 
  • Pleasure craft, such as a corporate yacht 
  • Food and drink 

It is primarily the rules around food and drink people are interested in at this time of year. Examples of where food and drink are 50% deductible include: 

  • Business meals consumed away from the business premises (i.e. an offsite Christmas function, taking a client or staff member out for dinner etc). 
  • Food and drink consumed on the business premises at a party, reception, celebration meal or other social function (including after work drinks or a Christmas party). Note: this does not apply to everyday meals provided in a staff cafeteria or light working lunches provided to staff. 
  • Any event or function away from business premises to build staff morale or goodwill (i.e. Friday night ‘shouts’ at the pub). 
  • In an area of the business premises reserved for use at the time by senior staff, such as an executive dining room used to entertain clients. 

These rules can be quite a grey area so please contact us if you would like some clarification before you spend. 

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