Can I Put My Football Season Ticket Through The Business?
To all my fellow sport fans out there, hasn’t it been a summer full of activity! On top of the yearly sporting events that we love to watch, we have also had the Euros and the Olympics!
It doesn’t stop there, on Friday 16th August, it’s the start of the football season! Perhaps you are a season ticket holder for one of the top premiership teams and you just cannot wait for kick off.
The question is, can you put your season ticket through your business as an expense?
Whether it’s entertaining clients or having a social event with your colleagues, entertaining can be one of the most enjoyable aspects of having your own business and it can even strengthen relationships with clients or employees. If you’re thinking about taking your clients or staff to football matches through your work, it is important to be aware of whether or not this can be tax-efficient – especially when season tickets are so expensive.
In short, the rules are complicated! At PPF, we are here to put your mind at rest by outlining everything that you need to know and we are always more than happy to deal with these matters on your behalf if you would prefer to leave it in our capable hands. We can explain the rules regarding VAT and business entertainment, including how entertaining staff or clients is seen from a tax and accounting point of view.
Business Entertainment
According to HMRC, business entertainment should be provided free of charge to persons who are not employees. Any kind of hospitality can be seen as entertainment, such as the supply of food and drink or accommodation, using capital assets for entertainment purposes, or providing event or venue tickets
Client Entertainment – UK Based
- Expenses are not deductible for Corporation Tax and VAT cannot be reclaimed.
Entertaining current or potential clients does not constitute an allowable Corporation Tax deduction. Therefore, expenses for entertaining clients are not deductible for Corporation Tax and VAT cannot be reclaimed either.
Client Entertainment – Based Overseas
HMRC rules state that VAT may be reclaimed on entertaining overseas customers – they see it as “benefit of a kind and on a scale which is reasonable”. Additionally, if you or a staff member’s attendance is necessary, then the VAT on costs is also recoverable. VAT cannot be reclaimed on what is considered “corporate hospitality”, including sporting events.
Director/Partner Entertainment
Where entertainment is solely for directors or partners, the VAT cannot be reclaimed, but if directors and partners attend events alongside employees, the VAT can be reclaimed.
Employee Entertainment
- Expenses can be deductible for Corporation Tax and VAT can be reclaimed, but it may be considered a benefit in kind
As you may have guessed, the rules regarding employee entertainment are complex, and it does depend on factors such as the type of entertainment concerned. For example, an annual staff party could be allowable for Corporation Tax as long as under £150 per head is spent on items including food, drinks, tickets, accommodation and travel, and other terms are met. If you are VAT registered, please do not forget to keep the receipt as we will need this to reclaim the VAT!
Corporate Boxes
- For clients: No Corporation Tax deduction and no VAT reclaim.
- For employees: Corporation Tax deduction and VAT reclaim is possible, but it may be a benefit in kind.
As noted above, how corporate boxes are treated depends on how they are used and by whom. If a business buys two football season corporate box tickets, and takes a client, the VAT isn’t recoverable and nor is the corporation tax deductible, because it is business entertainment. If it is used for employee entertainment, then the VAT is recoverable and it is an allowable expense for corporation tax purposes. It is, however, a benefit in kind for both parties – unless the tax is paid via a PAYE settlement agreement.
We can help with all your tax issues
After reading or watching this blog, you can see that the tax rules and how they might apply to football season tickets are complex, so please do not panic!
It is always worth consulting an expert and we can help with all your tax issues.
Here at PPF, we can help sole traders, start-ups, subcontractors, and family businesses with their tax calculations, finding the most cost-effective way to treat such an expenditure – all with the aim of saving you both time and money so that you can spend it with those whom you love.
If you’d like to enquire about working with us, fill in our Quick Questionaire and we’ll be in touch to book in a discovery call.
Looking for some tax tips and advice? Check out PPF on YouTube!
