Stratford-upon-Avon
13 The Courtyard
Timothy's Bridge Road
Stratford-Upon-Avon
Warwickshire CV37 9NP
Many business gifts and hospitality costs are not tax-deductible under current rules.
Entertainment expenses including providing hospitality and business gifts are common, but the taxation of these expenses is strictly governed by HMRC.
For businesses carrying on a trade, HMRC legislation generally prohibits tax deductions for client entertainment. If an employee receives a dedicated allowance or is reimbursed specifically for entertaining clients, the expense is generally disallowed when calculating the employer's tax liability.
Meals consumed by the employee during valid entertaining occasions are typically not taxed separately. But if entertainment is deemed personal or social in nature for instance, entertaining personal friends or business acquaintances then the reimbursement becomes taxable income for the employee. Reciprocal business entertaining between business acquaintances that lacks a clear commercial purpose also falls into this category even if some business topics happen to be discussed.
Where an employer provides a round sum allowance not explicitly for entertaining, and the employee uses it for such purposes, tax liability may instead fall on the employee. This includes not only the direct cost of entertaining but also any incidental expenses such as transport or venue hire.
Entertainment includes hospitality and business gifts, except for free samples used to advertise to the general public. Gifts that clearly display an advertisement for the donor may qualify for a limited exemption. However, this exemption does not apply to gifts of food, drink, tobacco, or vouchers, and the total cost per recipient must not exceed £50 per year.
Anyone claiming an exemption for entertaining expenses should keep clear records detailing the amount spent, who was entertained and the business reason behind the expense to support any claim.
Grenfell James Technology Adoption Index
How does your business perform against others adopting financial tech? Find out with our interactive diagnostic:
1.
How does your business receive invoices?
A)
Invoices are mainly received in paper form
B)
Invoices are mainly received by email
C)
Invoices are emailed then automatically forwarded to a designated mailbox
2.
How are purchase invoices processed?
A)
Invoices are entered manually
B)
Invoices are attached to manually raised invoices
C)
Automated software (e.g. ReceiptBank, 1Tap, HubDoc etc) collates invoices
3.
How are accounts processed?
A)
Using Excel/paper-based
B)
Using Computer-based, offline software
C)
Using cloud-based accountancy software
4.
How often is business data revised?
A)
Data is updated annually
B)
Data is updated quarterly
C)
Data is updated monthly or more often
5.
How is banking updated for your business?
A)
Banking is updated manually
B)
Banking is updated by imports
C)
Banking is updated via a live feed
6.
How are bank payments made?
A)
Bank payments are manual
B)
Bank payments are made using bulk imports
C)
Bank payments are made directly via accounting software
7.
How are bank receipts reconciled?
A)
Receipts are chased and reconciled manually
B)
Receipts are chased and reconciled automatically
C)
A third-party platform is used to chase debts and collect fees
8.
How often are management reports produced?
A)
No reports are provided
B)
Reports are provided but often too late to be valuable
C)
Reports are automated with real-time information
Score 8-12:
Curious Exploration
Your financial technology phase is Curious Exploration
% of respondent businesses are in this phase too.
Switching accountancy systems may seem like an upheaval, but can be much more straightforward than most businesses imagine. From talking to our clients, they have found moving from paper invoicing and desktop-based accounting software to the cloud and apps quickly makes the transition process a worthwhile investment of time. Digital accounting solutions bring in streamlined processes, up-to-date business data and greater confidence in the accuracy of information when making financial decisions.
Grenfell James works with your team to fully assess the needs of your business and minimise the impact of any transitions for solutions we recommend.
Score 13-19:
Measured Discovery
Your financial technology phase is Measured Discovery
% of respondent businesses are in this phase too.
Once cloud accountancy software is in place, there’s still plenty of scope to improve your accountancy processes and make sure your business is maximising the benefits of adopting a digital accounting solution. Grenfell James assesses each business to understand how any implemented solutions are being used, identify areas for improvement and the needs of the business overall to support your business goals and achieve success.
Our team of experts can discuss a range of time-saving automation and get different apps and cloud-based solutions talking to create and manage a digital accountancy eco-system to help your business grow.
Score 20-24:
Bold Innovation
Your financial technology phase is Bold Innovation
% of respondent businesses are in this phase too.
You know the benefits of accounting technology and the impact it can have on your business goals. If you want to take it a step further, our team can conduct a systematic review of your processes, apps and business goals to ensure your digital accountancy ecosystem is keeping pace with the changing needs of a growing business.