Firms told to keep taxman happy and not over-entertain
CORPORATE sports fans in the West Midlands looking to capitalise on the fact the region now has four Premier League football teams have been warned they could be under scrutiny from the taxman.
Accountants and business advisers Horwath Clark Whitehill said HM Customs and Revenue may be looking closely at firms taking executive boxes at the various clubs to ensure they were not being used to offer unlawful perks to staff.
Johnathan Dudley, managing partner of the practice and a keen West Bromwich Albion fan, said: “At this time of year, many businesses are considering committing to executive boxes at football and rugby clubs.
“The concept is great, with corporate guests being captive audiences for the duration of the build up and for the match itself. Work time is not lost as the games are always out of hours and there are spin-off profiling and networking opportunities to boot.”
Mr Dudley said if a firm’s budget did not stretch to a box then some may be tempted to have executive seats with access to bar and restaurant facilities.
“The Revenue are very alive to the opportunities for such expenditure to be used to provide perks to staff that might not find their way on to returns of employee benefits in kind, and they can and do follow up particularly excessive hospitality given to specific customers,” he cautioned.
“It is not uncommon for Revenue officers to attend sports events to see who is in the executive boxes, and the whole practice is often viewed with scepticism.
“Many companies have experienced real inconvenience at the hands of the Revenue as a result of providing corporate hospitality and it is important to be able to justify the business reasons for entertaining those invited.”
Mr Dudley said if firms wanted to avoid breaking the law they should not over-entertain particular customers but if they genuinely wanted to treat someone to a game then they should only invite those who could provide a real benefit to the business.
