Revenue Note for Guidance

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Revenue Note for Guidance

840 Business entertainment


This section ensures that business entertainment expenses are not allowed as a deduction for the purposes of income tax or corporation tax. Entertainment expenses include expenses incurred on the provision of accommodation, food, drink or any other form of hospitality. The section also provides that capital allowances are not granted in respect of assets used for entertainment for income or corporation tax purposes. The section applies in relation to the provision of a gift in the same way as it applies in relation to business entertainment expenses.


Definitions and construction

(1) “business entertainment” is defined very broadly and covers any form of hospitality provided directly or indirectly by a trader, a member of his/her staff or someone acting on behalf of the trader. The definition extends to cover expenses incurred in or assets used for providing anything incidental to the provision of entertainment, but does not include anything provided for genuine members of staff (for example, Christmas party). This exclusion for staff members does not apply if the provision of entertainment to them is incidental to its provision also to others.

“staff” includes employees, directors of a company and other persons engaged in the management of a company.

The restrictions provided for by this section extend to trades, businesses, professions and employments.

(5) The section applies to the provision of gifts as it applies to the provision of entertainment.


The main restrictions are that —

  • (2) business entertainment expenditure incurred is not deductible in determining the profits of any trade, profession, business or employment, and
  • (3) capital allowances are not available in relation to any assets used in the provision of business entertainment.

(4) The non-deductibility of expenses also applies to all payments and expense allowances placed at the disposal of employees (including directors) for the purposes of business entertainment.

(6) Where payments for services include amounts in respect of business entertainment these amounts are not deductible. The inspector is to determine the amount, and this determination may be amended by the Appeal Commissioners or the Circuit Court.

Relevant Date: Finance Act 2021