Trade shows & exhibitions

Conditions

1. Trade shows, exhibitions and promotional events arranged for the purpose of publicising a business's products or services are not in themselves business entertainment, and the direct costs of participating — stand hire, exhibition space rental, entry or registration fees, shell-scheme construction, display boards, signage, printed promotional materials and product demonstrations — are allowable business expenses. HMRC confirms in BIM45050 that 'promotional events arranged for the purpose of publicising a trader's products are not in themselves business entertainment.'
2. Food, drink and other hospitality provided at the event is treated differently. Where a business provides refreshments to visitors at its stand or hosts a drinks reception at the show venue, the cost of that food, drink or entertainment is disallowed as business entertainment under section 45 ITTOIA 2005 / section 1298 CTA 2009, regardless of the promotional context. The BIM45050 example given by HMRC illustrates this clearly: a car manufacturer's test drive event is allowable, but if the same event includes a golf day, the golf element is disallowed. The food and drink at the stand is the trade-show equivalent.
3. Product samples handed out at the show are allowable where they are genuine samples of goods the business sells, given to advertise the products publicly. Branded promotional items given away at the stand are subject to the usual gift rules: they must carry a conspicuous advertisement, must not be food or drink, and the total cost per recipient must not exceed £50 per tax year or accounting period (see branded-merchandise).
4. Travel to and from the exhibition — by car, rail, taxi or air — is an allowable business travel cost where the trade show qualifies as a temporary workplace. Accommodation for overnight stays required by the exhibition schedule is similarly allowable. These costs are governed by the normal business travel and subsistence rules, not the trade-show-specific rules.
5. A permanent contribution to an exhibition guarantee fund (a one-off endowment-style payment to secure a place in a major exhibition) may be capital rather than revenue if it confers an enduring benefit, and should be considered separately from annual participation fees. HMRC addresses this category of expenditure at BIM45305.
6. For limited companies, the corporation tax deduction follows the same allowability rules as for sole traders. If the company sends employees to staff the stand, their wages, NIC and reasonable travel are all deductible costs of the event.

Common mistakes

• Including the bar tab or dinner for clients entertained at the show as part of the exhibition invoice — food and drink for visitors is disallowed business entertainment however the invoice is presented.
• Treating trade show participation costs as capital because the stand design was expensive or the exhibition is prestigious — stand hire and display costs are revenue expenses unless they create a genuinely enduring physical asset (very rare).
• Forgetting that promotional items given to visitors follow the branded-gifts rules: the £50/person/year limit and the conspicuous-advertisement condition still apply.
• Claiming travel and accommodation at enhanced rates not actually incurred, or including personal tourism expenses added on to a trade-show trip.

What to keep

• Invoice from the exhibition organiser showing the stand space, hire period and cost.
• Receipts for stand construction, display materials and signage.
• Travel and accommodation receipts with a note confirming the business purpose.
• A separate record of any hospitality spend at the event (to ensure it is excluded from the business expense claim).

Real-world example

A sole trader attends a two-day industry trade show. She pays £900 for a 3m × 2m exhibition stand, £200 for roller banners and printed brochures, and £85 for train fares and one night's hotel. She also buys a round of drinks for five clients at the show bar, costing £60. The stand (£900), display materials (£200) and travel/accommodation (£85) are all allowable. The client drinks (£60) are disallowed business entertainment and must be excluded from her claim.

Frequently asked

Related allowances