Box Seats & Business: The Tax Implications of Entertaining Staff and Clients at Events

It’s no secret that a night in a box at a concert or sporting event can be an unforgettable experience – a little luxury, some live entertainment and a fantastic way to reward your team or impress clients. But when the company is footing the bill, what are the tax consequences?

Let’s unpack the tax treatment of corporate hospitality – and in particular, what happens when a limited company buys box seats at an event.

First things first: what counts as a business expense?

HMRC has strict rules on whether something is "wholly and exclusively" for the purpose of trade – and unfortunately, entertainment is a bit of an outlier. Most client and staff hospitality falls under specific tax rules with limited (or no) relief available.

1. If box tickets are given to clients or prospects

Whether it’s one client or a dozen, the tax treatment is the same.

✅ Legitimate business expense?

Yes – the cost can (and should) be included in your company’s accounts rather than paid by you personally.

❌ Corporation tax relief?

No. HMRC considers this “business entertainment” and you cannot claim corporation tax relief on it.

❌ VAT recovery?

No – VAT on client entertainment is not recoverable (except potentially where the client is from overseas).

❌ Benefit in kind for staff?

If no staff or directors are attending, there will be no benefit in kind (BIK) to worry about. 

2. If the box is used to entertain employees only (with no clients or suppliers present)

Let’s say you’re rewarding your team for smashing a project or hitting a target.

✅ Legitimate business expense?

Yes – this is classed as staff entertainment and can be paid for by the company but consider any potential tax implications on the employee. 

❌ Corporation tax relief?

Staff entertainment costs are deductible for corporation tax purposes.

✅ VAT recovery?

Yes – if the entertainment is only for staff (and not incidental to entertaining clients or prospects) VAT is normally recoverable.

❌✅ Benefit in kind for staff?

That depends on the cost and the frequency:

• If the cost per head is £50 or less, and it’s not part of a salary sacrifice arrangement or contractual obligation, it may qualify as a trivial benefit – no reporting or tax.
• If it’s over £50 per head or not trivial, it could become a taxable benefit. To avoid this, you could potentially:
  • Use your annual staff party exemption – which covers up to £150 per head per year, including VAT and all associated costs (travel, food, etc.) provided it is a recurring annual event.
  • Make sure the event is open to all employees and is not a one-off perk just for senior staff.

If the event doesn’t meet these criteria, it would be a benefit in kind, and you’d need to report it on a P11D or operate a PAYE Settlement Agreement (PSA) to cover the tax and NIC on behalf of employees.

3. If both employees and clients attend

This is where things get tricky.

• The entire cost of the box becomes business entertainment in HMRC’s eyes – no corporation tax deduction and no VAT reclaim, even for the employee proportion.
• If directors or staff are present, there could still be a BIK issue, depending on how the invite is framed.

To keep things clear, avoid mixing staff and client entertainment unless you’re happy to accept that the tax relief is off the table.

Summary: What can you claim?

Final Thoughts

Box seats at an event may be a brilliant way to build relationships or reward your team – but it pays to plan ahead for the tax consequences. If you’re trying to be as tax-efficient as possible, think carefully about who’s invited and how often these events happen.

And as always – if you're unsure whether your event qualifies as allowable or trivial, it's worth getting proper advice to avoid unexpected tax or National Insurance bills.

Need help?

Why not book a meeting with us to discuss your circumstances and see how we can help.