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

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 (see the Wholly and exclusively guidance note), or

3. •

   business entertaining (see the Entertaining and gifts guidance note)

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