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Hello, I have a VAT & Tax question - can VAT be reclaimed on

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Hello, I have a VAT & Tax question - can VAT be reclaimed on the cost of working lunches? It is not entertainment and you are asking staff to give up their lunch. Does the answer change if clients are also present? Does having the lunch in the office premises e.g. the Boardroom make a difference? In what circumstances is the cost of the working lunch Tax deductible? I would appreciate help with achieving clarity in this matter.Thanks, CAS
Submitted: 10 months ago.
Category: UK Tax
Expert:  Sam replied 10 months ago.

Hi CAS

 

Thanks for your question

 

Not normal working lunches no, as we all have to eat to live , and the fact that the employees work through their lunch has no bearing on any additional expense that the company has had to bear.

 

However if there is a business meeting, and the employer provides that lunch then it matters not whether clients are present or its just staff attending a business meeting, so this would be allowable, as this is then deemed to be a business cost first and foremost, and it does not matter where that meeting takes place.

 

Thanks

 

Sam

 

 

 

 

Sam, Accountant
Category: UK Tax
Satisfied Customers: 12795
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
Sam and 6 other UK Tax Specialists are ready to help you
Customer: replied 10 months ago.

Hi Sam, just a further query. I just want to clarify on the VAT element of the business working lunch.The fact that there is provision of food and drink - will VAT notice 700/65 come into effect? So the VAT & Tax rules are effectively different. My understanding - VAT is allowable for the 'ees and overseas visitors only and not UK visitors to the meeting. So costs for VAT purposes would have to be apportioned accordingly. Please may I have your view on this. Thanks, CAS

Expert:  Sam replied 10 months ago.

Hi CAS

 

Thanks for your response

 

I can see your stance on this and although this arguably does fall with business expenses rather than business entertainment. I tend to apportion the cost to represent the employees as allowable for VAT purposes, as HMRC (both VAT and Tax) do then have a habit of treating this as business entertainment.

 

SO I would agree with you and adhere to VAT notice 700/65

 

Thanks

 

Sam

 

 

 

Customer: replied 10 months ago.

Hi Sam, I think it's a case of being pragmatic & sensible.


Having attended a Board meeting working lunch - there is so much waste or over-purchase of sandwiches anyway! I'm sure the legislation is to stop abuse of fancy meals out - my client wanted to know what the situation is. I'm sure there is some case law (I can't remember what it is) regarding work- meeting lunches- but surely materiality also has to come into it too? CAS

Expert:  Sam replied 10 months ago.

Hi CAS

 

Thanks for your question.

 

At the top of my hat I can only find case law relating to annual conferences and a sole trader, within the Business Income manual -

I am about to meet with clients but will have a trawl through the Employment income manual (for staff) and further within the Business Income manual for clients on my return

 

Thanks

 

Sam

 

 

 

 

 

 

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