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Peter Savage looks at the rules governing
corporate and staff entertainment and challenges
female readers to make him eat his hat
T wo weeks ago I was lucky to
be invited to a golf day with
a broadcast dealer whose
business is, co-incidentally, a supporter
of tv-bay. It was a fantastic day and
everyone really enjoyed it but it raised
several queries that I thought worthy of
addressing in an article.
• The event must be open to all staff (if
you hold events for separate branches
or departments, it must be for all staff
relevant to the branch/department).
You’re partying for the taxman
• You can claim back VAT but this might
be restricted if the event was also
attended by customers.
The first query was tax-related: how
does the taxman treat entertainment?
Is it, for example, tax deductible?
Unfortunately, the days of tax-free
corporate entertaining are long gone:
the cost of such entertaining can be
offset against profit and loss but cannot
be offset against the company’s tax bill.
Nor can businesses claim back the VAT
on this type of expense.
It’s also important to note that you
must demonstrate that the majority of
attendees were customers, or people
you do business with; otherwise it
will be classed as a personal liability.
It is, therefore, good practice to
keep a detailed note of who attends
your functions as, if your company
experiences a tax inspection and
you cannot prove the event was
predominantly for customers, it could
be classed as personal income.
Don’t spend, spend, spend
Which brings me to my second
question: is there a limit to the amount
you can spend, as an allowable
business expense, on entertaining your
own staff? Yes, and it isn’t very much.
Here are the rules:
• The total cost must not exceed £150 a
person, a year.
• That £150 limit includes VAT, transport
• The £150 limit is not an allowance;
if the cost exceeds £150 the whole
amount is taxable.
• The event must be primarily for
42 | TV-BAY MAGAZINE: ISSUE 80 AUGUST 2013
• The event must not be for directors
only. • The cost of the whole event is an
allowable expense for your business
(subject to the rules, above).
So if the dealer who organised the
golf day had taken his staff out for the
evening after entertaining his clients,
the business could easily have used
up a huge amount of its allowable staff
expenses. When is entertaining a bribe?
Once you have passed the test proving
your entertainment was a viable
business expense, there are other
aspects to be accounted for in today’s
business climate. Question three: could
the entertainment be construed as
a bribe? The Bribery and Corruption
Act came into effect in 2011 and I’ve
discovered that most people I’ve talked
to don’t understand the seriousness
of the act or how easy it is to break its
guidelines. For instance, the maximum prison
sentence for being convicted of bribery
is 10 years. Yup, that says 10 years.
It is also a requirement that companies
should have clear anti-corruption and
bribery policies that demonstrate that
costs are, as required by the act,
proportionate and reasonable. Best
practice for our industry is, in my view,
for corporate entertainment costs
not to exceed £250.00 a person.
Companies should also have policies
on receiving and giving gifts – and keep
clear, documented records of them.
Impact on events
It is interesting the difference this has
made on certain events. When I was
with one of the main sponsors (a
major corporate) of the recent Lions
tour, I asked him about his company’s
sponsorship beyond their name
appearing, quite small, on the training
kit. I assumed it included tickets to
take customers to matches. Not
possible, he said, as the cost of flights
(in economy) to Australia would exceed
the individual allowance. Entertainment
was limited to three corporate golf days
in the UK where guests had access to
players before they went on tour. Long
gone, again, are the days when a well-
known IT storage manufacturer flew
its top 20 UK customers first class to
watch England in the World Cup final.
A moral dilemma and a challenge
Having dealt with business
entertainment, staff entertainment, and
bribery and corruption – all on the back
of an excellent dealer golf day – I came
up with my own moral dilemma, and
that was of sexism.
Most corporate days in our industry
are tailor-made for men. At golf and
track days women rarely take part and,
if they do, are often confined to being
caddie car drivers or drinks providers,
pandering to the needs of testosterone-
fuelled men driving cars at their limits.
Don’t get me wrong; this is not a
criticism. I would simply like to even the
balance. There is a time and place for golf
days and spending quality time with a
customer whilst participating in a sport
where the best can have a competitive
game with the worst (and that is not
a cheap jibe at the tv-bay editor’s
first appearance at a golf day!). But
there must be some form of corporate
entertainment that isn’t another male
élite day. The two broadcast corporate
events are – sigh – golf days and
if more than one woman were to
compete I would eat my hat.
So female readers of tv-bay unite and
give me examples of unisex corporate
events with wide appeal and I’ll commit
to holding one within the next year.
If you would like to know more about
how we can help broadcast companies
do contact me at peter.savage@azule.
co.uk and/or write to the tv-bay editor.
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