Entertaining expenses are costs incurred for the purposes of maintaining or developing a business relationship with potential or existing clients, partners, or collaborators.
You must be aware of anti-bribery laws if you cover entertaining expenses, as there is a risk that any entertainment your business offers (eg nice dinners or outings) could be considered bribery (ie illegally incentivising people to do business with you). The general principle to abide by when deciding which entertaining expenses are honest and legal is that expenses should be reasonable, proportionate to purpose, and incurred in good faith. They should be connected to a legitimate business activity (eg discussing a collaboration agreement) and should be no more lavish than needed. If you indicate that you cover entertaining expenses, this Expense Policy will include a clause explaining these anti-bribery law considerations.
You can make an Anti-bribery policy to set out in more detail how your business avoids engaging in bribery. For more information, read Workplace anti-bribery rules.