Part 2

Trading income
Chapter 4

Trade profits: rules restricting deductions

Business entertainment and gifts

Business gifts: exceptions
47
1
The prohibition in section 45 on deducting expenses incurred in providing gifts does not apply in any of cases A, B, C and D.
2
Case A is where—
a
the gift is of an item which it is the trader’s trade to provide, and
b
the item is given away in the ordinary course of the trade in order to advertise to the public generally.
3
Case B is where the gift incorporates a conspicuous advertisement for the trader unless—
a
the gift is food, drink, tobacco or a token or voucher exchangeable for goods, or
b
the cost of the gift to the trader, together with any other gifts (except food, drink, tobacco or a token or voucher exchangeable for goods) given to the same person in the same basis period, exceeds £50.
The Treasury may by order amend the sum for the time being specified in paragraph (b) so as to increase it.
4
Case C is where gifts are provided for employees of the trader unless—
a
gifts are also provided for others, and
b
the provision of the gifts for the employees is incidental to the provision of gifts for the others.
5
Case D is where the gift is given to—
a
a charity,
b
the Historic Buildings and Monuments Commission for England, or
c
the Trustees of the National Heritage Memorial Fund.