Can you claim vat on staff entertaining

The input VAT associated with directors or partners who attend such an event is also recoverable. Non-employees include pensioners and former employees or former partners , job applicants or interviewees. Recovery of VAT arising from a staff party requires staff to attend.

If the attendees are solely directors of companies or partners in partnerships the input VAT cannot be recovered. This includes celebrations to improve moral or reward good work. If meals are provided on a business trip which is away from the usual place of work the VAT incurred on reasonable subsistence can be recovered. This covers subsistence incurred by staff, directors and partners.

VAT receipts should be obtained when recovering tax associated with subsistence. In the few instances where recovery is possible additional records should be kept to demonstrate that the facts meet the strict criteria required to permit the VAT to be claimed back. As a final practical situation, imagine that you own a building business, and use a combination of subcontractors and employed builders to carry out the various jobs.

You agree to pay the petrol bills of the subcontractors who use their own vehicles if they give you a petrol receipt as well as their meal and hotel costs for jobs that are away from your local area.

What is the input tax position in relation to the subcontractor expenses? Access a range of business-focused support, advice and information from a range of sources in our business resources area. Skip to content. Let me entertain you…when can VAT be claimed Businesses can claim input tax on their expenditures, assuming that they are VAT registered and not partly exempt. Example 1 John is the audit partner in a firm of accountants ie, he is a business owner.

What about the staff Christmas party? Planning tip — a small charge for guest meals? When are staff acting as hosts? Where entertaining foreign customers doesn't meet HMRC's definition of 'reasonable', rather than reclaim the VAT and have to account for it as a personal perk see above you can simply not claim it.

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