Commentary on Sections Example 3 Ne = £5,000; Da = 183; De = 183; Smg = 0 Section 356: Disallowance of business entertainment and gifts expenses
1545.This section prevents a deduction from earnings of expenses incurred in providing entertainment or a gift in connection with the employer’s trade, business, profession or vocation. This general prohibition is subject to the exceptions in sections 357 and 358.
1546.This section derives from section 577(1)(b), (5), (7) and (8) of ICTA and contains new drafting material.
1547.Subsection (1) contains the general prohibition on deducting expenses incurred in providing entertainment or a gift.
1548.This section makes it clear that the trade, business, profession or vocation to which the business entertainment expenses relate is the trade etc of the employer. See Change 94 in Annex 1.
1549.Subsection (2) refers to certain exceptions from the general prohibition in subsection (1).
1550.Subsection (3) extends the meaning of “entertainment” and brings incidental expenses within the scope of the section.