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Does Client Entertainment Really Belong in a Brown Paper Envelope?


Every year seems to bring the event organiser’s world a hot potato. Not long ago it was changes to VAT with TOMS. This year it’s the Olympics and why so many clients DON’T want to be anywhere near London this summer. Last year’s hottie was the Bribery Act 2010 (although it didn’t come into force until 1st July 2011) and it’s showing no sign of cooling down.To be fair, the heat doesn’t seem to be coming from the Act itself but from how many organisations have reacted to it. It seems to have struck fear into the heart of Corporate plc with hastily drawn up policies causing hospitality and customer entertainment plans to be cancelled and question marks raised over any future activity.You can understand the concern. No-one wants to expose their employers to a court case and employers equally don’t want to leave company policy down to employee interpretation. However, in reality, the Act is merely an update of something that was already there. The 2010 Act is aimed at tightening up definitions of corruption and providing guidance on what organisations could do to demonstrate that they have taken steps to minimise employees being accused of bribery. In fact, it is largely directed at international trade relations.Many companies rely on sporting or bespoke hospitality and entertainment as an essential part of their customer contact strategy. In some cases, it is even an expected part of the business relationship. (Although I’ll save that particular soap box for another time!)

So, where does the Act leave all those BDMs, sales managers and account managers around the country looking to build and maintain business relations?

Well, it leaves them in pretty much exactly the same place as they’ve always been.

The Secretary for Justice, Ken Clarke, states in his foreword to a guidance document on the Act, “Rest assured – no one wants to stop firms getting to know their clients by taking them to events like Wimbledon or the Grand Prix.”

The government has produced a quick guide to help clean up any confusion which goes even further:

“As a general proposition, hospitality or promotional expenditure which is proportionate and reasonable given the sort of business you do is very unlikely to engage the Act. So you can continue to provide tickets to sporting events, take clients to dinner, offer gifts to clients as a reflection of your good relations, or pay for reasonable travel expenses in order to demonstrate your goods or services to clients if that is reasonable and proportionate for your business.”

So, if you hear of anyone stressing that they want to entertain customers but don’t want an all-inclusive package at Her Majesty’s pleasure, please direct them to the government guide. We all need to get back to the business of doing business and stop worrying about being pulled up on a hospo-gate charge!

http://www.justice.gov.uk/downloads/guidance/making-reviewing-law/bribery-act-2010-quick-start-guide.pdf

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