When Can You Claim VAT on Entertainment and When Not?

By K. Collen | 30 Jan 2023

Entertainment is an essential part of running a business, but it can also be a source of confusion when it comes to VAT. This blog will provide a clear understanding of when you can claim VAT on entertainment and when not.

1. Meals with Clients: Going out for a meal with clients is considered entertainment and can be claimed as a business expense, but the VAT cannot be claimed. However, there is an exception. If one of your staff members is going out for a meal with a client and is away from the office for longer than one night, the VAT can be claimed back. This also applies to any meals enjoyed by you and your staff, including alcohol, while you are out of town on business for more than one night.
2. Office Refreshments: Normally, VAT cannot be claimed for office refreshments such as tea, coffee, and snacks. But if you purchase refreshments for the delegates you are training, the VAT on those refreshments can be claimed.
3. Staff Year-end Functions: The input tax paid by the employer for acquiring food, drink, or any other goods or services and the venue used to provide entertainment at the staff year-end function cannot be claimed by the employer.
4. Catering Services for Staff Canteens: VAT cannot be claimed on catering services for staff canteens.
5. Marketing Promotions and Events: VAT cannot be claimed on foods, beverages, entertainment, and services purchased for marketing promotions and events.

In conclusion, it is essential to understand the rules and regulations regarding VAT on entertainment to ensure that you are not making any errors when claiming expenses. If you are unsure, it is always best to seek advice from a professional tax consultant.