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Entertainment expenses

Best to arrange for your company to pay for these directly (enter in Business Entertainment Category under Expenses in spreadsheet). Although this is a disallowable item for corporation tax, it is still more tax effective than paying for it personally if you are a higher rate tax payer – then for us to disallow the cost when we calculate the corporation tax. IE if the corporation tax rate is 20%, you will in effect pay tax on these items at this rate, as opposed to paying tax @ 25% as a higher rate tax payer on dividend income (or even more with income from employment of course).

Business Entertainment relates to taking out a prospective client/client/supplier to lunch/dinner etc so still must be business related!

 

By graeme on May 6, 2011


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