Can I claim entertaining clients as a business expense?
Answered 11 March 2026
The answer is clear from the sources. Here is a comprehensive response:
Can I Claim Entertaining Clients as a Business Expense?
The short answer is: No — client entertaining is specifically and broadly disallowed as a tax deduction.
What the law says
There is a statutory prohibition on deducting the cost of business entertainment:
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S45 ITTOIA 2005 (for unincorporated businesses/sole traders and partnerships) and S1298 CTA 2009 (for companies) deny relief for "any expenses incurred in providing business entertainment" by any person or by a member of that person's staff.
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Crucially, the purpose of the entertainment is irrelevant. Even if the entertaining expenditure is incurred wholly and exclusively for the purposes of the trade or profession, it will still be disallowed by virtue of these provisions.
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This disallowance also extends to payments made to employees for entertaining — whether as a reimbursement of specific expenditure or as a general entertainment allowance — because the employer is in a position to know the expense is for business entertainment.
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Travel costs incidental to entertainment are also not allowable. For example, if a company pays for its customers to travel to a sporting event, the cost of that travel is not deductible.
HMRC guidance / practice
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HMRC confirms that the disallowance is absolute and overrides the general "wholly and exclusively" test. The landmark case of Bentleys, Stokes & Lowless v Beeson [1952] 33 TC 491 — where solicitors' client lunches at which business was discussed were allowed — would no longer be decided in the taxpayer's favour under the current legislation.
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The disallowance applies even where the entertaining is genuinely commercial in nature and has no private element.
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Where travel is provided to an event that has a mixture of business and entertainment, HMRC will look at the primary purpose of the event. If the main purpose is work-related (e.g. a press conference with light refreshments), travel costs are allowable. If the main purpose is entertainment (e.g. a social weekend with a product presentation), travel is incidental to entertainment and is not allowable.
⚠️ Key Takeaway
Entertaining clients — whether taking them to lunch, sporting events, or other hospitality — cannot be claimed as a deductible business expense for tax purposes, regardless of how genuine the business purpose is. This is a hard statutory rule under S45 ITTOIA 2005 / S1298 CTA 2009.
Citation sources
Although ordinary travel in itself is not business entertainment, travelling costs incurred in connection with business entertaining are not an allowable expense. This is because they are ‘incidental’ to the provision of entertainment (see BIM45020). For example, if a company pays for its customers to travel to a sporting event then the cost of the travel is not allowable. On the other hand, the company may claim a deduction for transporting customers to an event that does not include any elemen
Before 1965 there were no special rules relating to business entertainment and it was considered in the same way as any other business expenditure. So long as it was incurred wholly and exclusively for the purposes of the trade it would be allowed. In the case of Bentleys, Stokes and Lowless v Beeson [1952] 33 TC 491 (see BIM37400) costs incurred by a firm of solicitors in taking clients out to lunch to discuss business were found to be incurred wholly and exclusively for the purposes of the pro
Where a trader makes a payment to an employee for entertaining that payment is disallowed by S45(2) Income Tax Act 2005 (ITA 2009) for unincorporated businesses and S1298(3) Corporation Tax Act 2009 (CTA 2009) for companies. This applies whether the payment is a reimbursement of specific expenditure incurred by the employee or if a general entertainment allowance is given to the employee. In both cases, the employer is in a position to know that the expense is for the purpose of business enterta