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Replies to Queries

13 October 2004
Issue: 3979 / Categories:


Readers' Forum



Replies to Queries — 1



Celebratory tax


Our client, a long-established company and industry leader, recently celebrated its fiftieth anniversary, which was in September 2003. It started planning a promotional party to celebrate the event many months before, but for various reasons the party did not take place until March 2004.



Readers' Forum



Replies to Queries — 1



Celebratory tax


Our client, a long-established company and industry leader, recently celebrated its fiftieth anniversary, which was in September 2003. It started planning a promotional party to celebrate the event many months before, but for various reasons the party did not take place until March 2004.


The invitees were staff and their spouses, and customers (normally without spouses). The party was in an old warehouse, with large displays clearly promoting company products and which were a major part of the evening. It is possible to split the overall cost down as to food and drink, £25,000; promotional displays, £50,000; hire of venue, £6,000; invitations and other promotional literature, £5,000; and consultancy to organise the party, £20,000.


Approximately 800 people attended, including 120 staff and their spouses.


The following questions now arise.




* What VAT can be reclaimed?


* How much of the promotional party can be claimed for corporation tax?


* Although the party took place in 2004, can its cost be charged in the 2003 accounts as the occasion arose in that year, and the decision to spend the money and to have the party was made in that year?




Readers' views are welcomed.


(Query T16,492)

Issue: 3979 / Categories:
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