VAT and customer entertaining

VAT and customer entertaining

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Am I correct to clam vat when entertaining overseas clients who are customers to the company? My understanding is the input tax is for customers only not potential customers.  

If so can I also claim the input tax for the employee's (director) percentage of the entertaining? 

Thank you in advance for your help.

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By ramin
29th Jul 2015 22:32

The VAT cannot be recovered on business entertainment expenses. It makes no difference whether the person being entertained is an existing customer, a potential customer or any other person who is not an employee.

Business entertainment expenses include: food and drink, accommodation, sporting events and facilities, business gifts, payments made to third party business entertainment organisers, free samples, when you provide entertainment or hospitality only for directors.

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By User deleted
29th Jul 2015 23:03

@OP

You're right it's allowed provided the entertainment is of a kind and on a scale which is reasonable, having regard to all the circumstances. Value Added Tax (input Tax) Order 1992 was amended by the 2011 order

As regards the director yes it can be claimed see Art 5(3)(b) here

Edit: just realised that I was commenting on a query dropped on here by the OP some two weeks ago!

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Replying to Richard Grant:
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By carnmores
30th Jul 2015 07:07

example?

taxguru wrote:

You're right it's allowed provided the entertainment is of a kind and on a scale which is reasonable, having regard to all the circumstances. Value Added Tax (input Tax) Order 1992 was amended by the 2011 order

As regards the director yes it can be claimed see Art 5(3)(b) here

Edit: just realised that I was commenting on a query dropped on here by the OP some two weeks ago!

 

would you care to give a pointer as to what is and what isnt reclaimable

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By User deleted
30th Jul 2015 07:44

Have a read of 2.1 and 2.2 here. Also para 3.2

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