Input tax ― staff and business entertainment

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note looks at the rules for recovering VAT on entertainment. In particular, it consider the scope of the input tax ‘block’ for business entertainment.

For an overview of input tax more broadly, see the Input tax ― overview guidance note.

For in-depth commentary on the legislation and case law in this area, see De Voil Indirect Tax Service V3.446.

Basics of input tax recovery on entertainment

There is a specific input tax block on goods and services used for ‘business entertainment’. The effect of this block is that VAT cannot be recovered even if the other normal conditions for input tax recovery are satisfied (as set out in the Input tax ― conditions for recovering VAT guidance note). There is an exception to the block for the entertainment of overseas customers. VAT is technically recoverable in relation to such business entertainment, but subject to quite stringent conditions (at least in HMRC’s view).

Determining when the input tax block applies will not always be a straight forward exercise and confusion

Continue reading

To read the full Guidance note, register for a free trial of Tolley+™

TAKE A FREE TRIAL

Popular Articles

Owner-Managed Businesses

Trade or hobby

Trade or hobbyInteraction of hobby farming rules and commercialityFarming has its own set of ‘hobby farming rules’, which historically have stated that a profit must be made every six years. This is known as ‘the five-year rule’, in that there can be five years of losses but there must be a profit

14 Jul 2020 13:50 | Produced by Tolley Read more

Employment Tax

Long service awards

Long service awardsEmployee recognition by an employer can be an important motivational tool, as well as having a positive effect on retention. Most employer awards made to an employee are treated as taxable earnings under ITEPA 2003, s 62 or as a benefit under ITEPA 2003, s 201 because they are

14 Jul 2020 12:11 | Produced by Tolley Read more

Owner-Managed Businesses

First year allowances

First year allowancesFirst year allowances (FYAs) are available on the following items:•first-year relief on qualifying new main rate plant and machinery (at 100%, which is described by HMRC as ‘full expensing’) and special rate assets (at 50%) from 1 April 2023 (companies only). These FYAs were

14 Jul 2020 11:41 | Produced by Tolley Read more

��˾��ҹ��