Can you claim vat on entertaining clients

So it can also apply to customers in other EU member states. You can reclaim VAT on the cost of entertaining an overseas customer of the business providing, in HMRC's words, it is "of a kind and on a scale which is reasonable". This effectively cancels a proportion, or all, of the VAT that has been reclaimed. HMRC will not permit a claim if the entertaining is part of a corporate event, such as a golf day, day at the races or trip to some other type of event.

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Search Area:. Please enter your postcode to see your nearest offices. Business Challenges. Looking for an accountant. To benefit from this, the event s must be open to all employees. However, if this entertainment occurs when those directors are away from their usual place of work, such as on a business trip, then VAT paid on the costs of travel, meals and accommodation can be reclaimed.

This means that if a director-only meal took place during a business trip — and, crucially, one that they would have taken anyway — tax relief is possible. The rules around staff and client entertaining are complex but there are ways to make this expenditure more tax efficient. How to Build Your Accountancy Team. Hospitality VAT rate set to rise to How to Register as a Sole Trader. What actually counts as an entertainment expense? Client entertainment Client or business entertaining covers expense occurred when hosting existing clients, potential clients or anyone else who is not an employee.

Tax relief on client entertaining One key thing to remember is that when taking clients out, always pay through the business rather than through personal accounts. However, if there are events where a partner or director is attending a staff event with fellow employees, then you can reclaim VAT on the entire event. For any business, having the opportunity to bring in potential customers or clients with entertainment can certainly help to improve revenue for the company.

Some businesses may wish to offer their customers various forms of entertainment such as golf days or sporting events. They may wish to offer hospitality events to say thank you for their custom. However, when it comes to these types of business entertainment, output tax will be due. There are often occasions where meetings will take place, perhaps in the office, with food and drink. Private use charges will not apply in this case. There are some tricky areas to navigate when it comes to entertaining clients in specific scenarios.