My client has a service supplier who occasionally entertains customers/suppliers in the course of providing the service. The supplier then recharges the cost of the entertaining in full (including any VAT), and adds VAT to their invoice.
I am pretty sure the supplier does not disallow the entertaining expense for CT and may or may not reclaim the included VAT (probably not). Is this treatment correct from the supplier point of view.
If the underlying expense is allowed for CT/VAT in the supplier, Does my client have to disallow them for both CT and VAT?