A Season of Receipts: Why the Hospitality Register Belongs on the November Board Agenda

By the second week of November, most London firms have a December diary that reads less like a work schedule than a social calendar. A box at a sporting fixture, a table at a restaurant near St James's, a case of wine sent to a client's office, a hamper that arrives with no obvious sender. None of it is corrupt. All of it is expenditure, and by January it will be sitting in an expenses system with a one-line description and no context.

The argument of this piece is simple. Firms of twenty to two hundred people do not need a compliance department to handle gifts and hospitality. They need a register, two thresholds and a person who reads it once a quarter — and they need that in place before December, not after the audit committee asks.

The policy nobody reads until January

Most smaller firms have a gifts and hospitality clause somewhere in the staff handbook. It will have been drafted by a solicitor, copied from a template, or inherited through a merger, and it will say something about 'reasonable' and 'prior approval' without defining either. It is discovered, typically, by an accounts assistant reconciling receipts in the first week of January.

A register changes the order of events. It converts an after-the-fact argument about whether a lunch was reasonable into a thirty-second decision made before the lunch.

Proportionality is the standard the law actually uses

The Bribery Act 2010 creates a corporate offence of failing to prevent bribery, with a defence of having adequate procedures in place. The Ministry of Justice guidance sets out six principles — proportionate procedures, top-level commitment, risk assessment, due diligence, communication and monitoring — and none of them demands a large compliance function. What they demand is evidence that the firm has thought about the risk and done something consistent with its size.

For a London professional services firm, the practical risk is rarely a brown envelope. It is the slow accumulation of favours in relationship-driven sectors — property, construction, recruitment, private client work — where a seat at a sporting event, a weekend at a supplier's cottage or a generous hamper can shade into an obligation. Proportionate controls are aimed at that pattern, not at the Christmas lunch.

Three tax points that surface every December

The compliance conversation tends to crowd out the tax one, and the tax one is where smaller firms most often lose money quietly.

First, business entertainment of UK clients is generally not deductible for corporation tax, and VAT incurred on it is generally not recoverable. Entertainment of overseas customers is treated more favourably, subject to conditions, but the distinction has to be recorded at the time — not inferred from a receipt in March. Staff entertainment sits under different rules again, and the annual function exemption is narrower than office folklore suggests.

Second, the trivial benefits exemption allows gifts worth £50 or less, but not cash or cash equivalents, not in recognition of services performed, and not under a contractual obligation. A hamper that costs £120 is not trivial, whatever the intention behind it, and it may create a reporting obligation for the recipient's employer.

Third, gifts that carry a conspicuous advertisement for the donor fall within separate rules on deductibility, with their own exclusions for food, drink and tobacco. A branded calendar and a case of claret are not the same thing, and the accounts team should not have to work that out from a photograph of a receipt.

A register capturing the recipient, the nature of the gift, the estimated value and the business reason answers all three questions at once.

What a register needs to do — and what it does not

The failure mode of hospitality registers is ambition. A firm introduces a twelve-field form, the form is ignored in December, and the whole exercise is quietly dropped in February.

A workable version has four or five fields: date, recipient and organisation, type of hospitality or gift, estimated value, and the person who approved it. Add a free-text line for the business reason, and stop there. A spreadsheet maintained by the finance team is sufficient for most firms of this size; specialist software is not the constraint.

Thresholds that match the firm's risk appetite

These should reflect the firm's own judgement rather than a competitor's template. A common and defensible structure runs as follows. Below £50 per head or per gift, record it, with no approval needed. Between £50 and £150, line manager or department head approval before the event. Above £150, or anything involving a public official, a regulated client or a procurement decision in progress, partner or director sign-off, with a note in the register explaining why it was appropriate.

Anything offered to a public sector client deserves separate treatment. NHS trusts, local authorities and central government departments maintain their own gifting rules, frequently stricter than the firm's, and a well-meant invitation can put a contact in an awkward position. A single line in the policy — check the client's own policy first — prevents most of the difficulty.

Red flags in relationship-driven work

Certain patterns should prompt a second look regardless of value. Hospitality offered while a tender is open. Gifts to the same individual more than twice in a year. Anything sent to a home address. Anything that arrives unsolicited and cannot be returned without embarrassment, in which case the usual treatment is to log it, share it internally or donate it. Invitations that include travel and accommodation, particularly overseas. And the quiet accumulation of small kindnesses from one supplier over several years — the pattern that appears most often in enforcement actions and least often in training slides.

Rolling it out in November without souring the season

The final objection is always cultural: a register signals distrust. It does not, if it is introduced properly.

Keep the message short. The firm is not restricting generosity; it is protecting the people who extend it. Approval should take minutes, by email if necessary, and the compliance owner should be someone colleagues already contact about expenses. Publish the thresholds. Review the register quarterly, and report numbers rather than names at board or partner level. Then leave it alone until the spring.

A firm that does this in November will spend December doing what the diary intended — building relationships — and January doing something more useful than reconstructing them from a shoebox of receipts.