Sales, advertising and marketing

Produced by Tolley

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Sales, advertising and marketing
  • Launch costs
  • Signs
  • Sponsorship
  • Capital
  • Wholly and exclusively
  • Business entertainment and gifts

Sales, advertising and marketing

Expenditure on sales, advertising and marketing activities may include amounts which are disallowable for the purposes of calculating trading profits. This may be because the expenditure is:

  1. capital in nature (see the Capital vs revenue expenditure guidance note)

  2. not incurred wholly and exclusively for the purpose of the trade, or

  3. business entertaining

Expense accounts that are described as sales, advertising, marketing, PR etc should always be analysed for disallowable items. Depending on the amounts involved, it may be appropriate to include a breakdown of expenditure with clear descriptions in the tax computation. This is particularly advisable if amounts fluctuate significantly from prior years, or if there is some other unusual event in the year which may prompt HMRC to open a compliance check.

This guidance note deals with the tax treatment of certain types of sales, marketing, advertising and other similar expenditure where there is HMRC guidance.

Where expenditure is capital in nature, it may be that capital allowances are available as an alternative; however, this will depend upon the item in question.

Launch costs

Businesses may incur costs in respect of the initial launch or establishment of a new product or brand. The costs may be from a mixture of sources, such as the acquisition of a titl

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