TAX TIP OF THE WEEK – Are entertainment costs ever tax-deductible?
There is a fine line between promoting your business (tax deductable) to customers and providing entertainment to customers (not tax deductible).
However you don’t have to completely rule out a tax deduction when trying to impress customers with food and wine, the law states that where there is an exchange of some sort then this cannot be entertainment.
This exchange doesn’t have to be a monetary amount but could be in the form of a quick questionnaire or feedback survey that the customer completes. All you need to do is retain the paperwork for proof.
Bear in mind though the trade has to be reasonable, so the cost of buying a full-blown posh lunch or dinner is unlikely to be considered so.