Skip to navigation | Skip to main content | Skip to footer
Menu
Search the Staffnet siteSearch StaffNet
Search type

Entertainment

HMRC guidelines about business entertainment claims are strict.

Reimbursement without deduction of business entertainment expenses related to the entertainment of customers must be clearly shown to be one of the following:

  • The fostering of new business
  • Maintenance of an existing business connection
  • The discussion of a specific business project

Legitimate business entertainment may occur where a member of staff takes a 'customer' out for a meal. However, a 'customer' can only be one of the following:

  • An external advisor
  • An outside student
  • A sponsor
  • A colleague from another university on collaborative work, where this entertainment furthers University business

It is generally viewed by HMRC that a staff-to-client ratio of no more that 1:3 should exist.

The following are NOT considered to be customers, so the cost of entertaining them does not qualify as legitimate business entertainment:

  • A person being paid a fee by the University
  • A Visiting Lecturer or Examiner
  • A member of staff
  • Any other person not directly furthering University business (this would include persons providing their services or knowledge without payment)

The purpose of the entertainment along with details of each attendee must be recorded.

Failure to adhere to these guidelines will result in the claim being classed as non-business entertainment and be subject to tax deductions which will be recharged to the School.

Expenses are not allowable if entertaining is really for social and not business reasons, even if some business topic happens to be discussed.

Staff are warned that HMRC may seek further proof or apply other tests to confirm that an event was for genuine business purposes.

The entertainment of existing students is unlikely to qualify as business entertainment.

Working Lunches

A working lunch may only be reclaimed without deduction of tax and NI contributions if the refreshments are:

  • light (e.g. sandwiches, biscuits and non-alcoholic drinks), and
  • taken in the place where the meeting is held (in other words, the meal is only a break in the meeting)

Meals held in a restaurant or with alcoholic drinks therefore do not qualify as working lunches and are liable for tax and National Insurance contributions.

Staff Entertainment

The University has approved a Non-Business Staff Entertaining Policy to provide a consistent approach to the funding of staff entertainment, together with HMRC guidance regarding the tax and NI implications. The full policy is available here.

The Policy allows each School/Faculty/Directorate or Department to contribute a fixed amount, currently set at £20 per head per annum, towards annual staff events at Christmas. This funding is not an entitlement and only applies to staff who attend the approved event.

Back to all Expenses Categories