VAT on free meals provided to volunteers?

VAT on free meals provided to volunteers?

Didn't find your answer?

Hi all, 

We are a registered charity and we have a restaurant on our premises for visitors.  We offer free meals from the restaurant to our volunteers.  At the moment we account for the output VAT on those meals and reduce our restaurant revenue by the value of the free food.

Is this VAT treatment correct? A little voice in my head niggles at me all the time  "wouldn't it be nice if we didn't have to pay the VAT on it!"

Replies (2)

Please login or register to join the discussion.

Portia profile image
By Portia Nina Levin
13th Aug 2015 10:25

You do not have to pay VAT on it

It is hospitality (aka entertaining).

Now either it will be viewed as staff entertaining (I understand that they are volunteers), or it will be treated as non-staff entertaining.

In the former case there is no input VAT disallowance, and the value of the output is nil, by virtue of VATA 1994, Sch. 6, para. 10.

In the latter case, the correct treatment is not to claim input VAT on the cost of providing this hospitality. And guess how much VAT there will be on the cost of providing the hospitality?

Either way, no input VAT that you cannot claim, and no output VAT to account for.

Thanks (0)
Replying to Anonymous.:
avatar
By RobbieR
13th Aug 2015 11:33

Aha! Brilliant, thank you Portia.

Thanks (0)