Attain Accountancy

“I sponsored a friend’s charity run — can I put it through the business?”
Short answer: only if you get advertising in return.

And HMRC is very clear about this in BIM45085.
🎗️ HMRC’s rule
If the payment is mainly to support the individual or cause, it’s not allowable.
If the payment gives your business public advertising, it may be allowable.

✔️ Allowable charity sponsorship
(according to BIM45080)
• Your logo appears on event materials
• You get a link on the charity’s website
• You receive measurable promotional exposure
• The sponsorship is structured as advertising
❌ Not allowable
• Personal donations
• Sponsoring someone because you like them
• Payments with no advertising return
• Anything driven by personal motives

HMRC’s wording in BIM45085 is blunt:
If the purpose is not wholly for business, the deduction fails.

If it’s marketing, great.
If it’s generosity, it’s not a business expense.

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🎤 “If I host a business event… can I claim it?”
HMRC: Tell me more… because it’s probably entertainment. 😅
Let’s talk about one of the sneakiest areas in the HMRC entertainment rules — promotional events.

Every week I hear:

“But it was a marketing event! We invited prospects! We talked about the business!”

I know.
You did talk about the business.
You did hand out brochures.
You did have a PowerPoint.
But HMRC’s manuals (BIM45055–BIM45060 if you’re feeling brave) have a very specific view on this.

🎪 HMRC’s rule in plain English
If your event includes hospitality, food, drink, or anything that feels like entertainment…
HMRC treats the whole thing as business entertainment.

Even if:

it’s a launch event

it’s a networking evening

it’s a “come meet the team” open day

you had branded banners everywhere

HMRC says: “Nice try, but no deduction.”

✔️ When events can be allowable
HMRC does allow costs where the event is:

genuinely advertising to the public (BIM45055)

open to anyone, not just clients/prospects

not selective, not invitation‑only

not centred around hospitality

Think:

a stall at a local fair

a public demo

a pop‑up in the high street

handing out samples

Basically: if it’s open to the world and not a party, you’re good.

“If I sponsor a local event… can I claim it?”

HMRC: Only if you’re getting something back.

Sponsorship is one of those areas where small businesses get very excited:
“I sponsored my friend’s charity run, that’s marketing, right?”

“I paid for a banner at my kid’s football club, that’s advertising!”

“I donated to a local event, that’s a business expense!”

But HMRC’s view (BIM45080–BIM45085) is measured. There must be a commercial benefit

HMRC only allows sponsorship costs when the business receives a genuine commercial benefit.
Expenditure is allowable if it is “wholly and exclusively” for the purposes of the trade.

If it’s advertising, you’re good.
If it’s generosity, you’re not good.

“I sent my clients some lovely branded gifts — that’s marketing, right?”

I can feel the hope in their voice. And I hate to be the bearer of bad news… but BIM45000 says no

Gifts to clients: usually not allowable
If it looks like entertainment, smells like entertainment, or feels like a treat… HMRC says no.
Hampers? No. Wine? Definitely no. Luxury chocolates? Still no. A branded candle? Sorry… no.
BUT — there is a tiny loophole
HMRC will allow gifts if they meet all of these:
• Cost less than £50 per person
• Carry a logo/ advert for your business
• Are NOT food, drink, to***co, or vouchers
So your branded notebook? Fine. Your branded umbrella? Go for it. Your branded gin bottle? Absolutely not

“Is client lunch tax deductible?”

Spoiler: HMRC says… absolutely not.

“But it was a business meeting… so lunch is an expense, right?”

I wish. Truly. I’d love nothing more than to tell you that your Pret panini and flat white are fully allowable. But HMRC’s Business Income Manual (BIM45000 if you fancy a bedtime read) says a firm nope.

HMRC blocks deductions for business entertainment — even when it’s genuinely for business.
Even when you did talk about work.
Even when the client did say yes.
Even when you really needed that coffee.