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taxadvisor.uk, Chartered Certified Accountant
Category: UK Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I own a VAT reg LTD company in England. Every day we buy about

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I own a VAT reg LTD company in England. Every day we buy about £5-10 worth of drinks for the office. Energy drinks, water, soft drinks, etc. We drink them while working on projects together and also during office meetings.

Is this something that we can a.) claim this as a cost fully and b.) Can we claim VAT on these items back?
Hello and welcome to the site. Thank you for your question.

If expenditure is incurred wholly and exclusively for business purposes, then it is a claimable expense in full.

Furthermore, VAT on this expenditure would also be recoverable if expense deemed allowable.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 3 years ago.

Hey.


 


Please can I ask two follow ups to this.


 


When you say whole and exclusively for business purposes, does that mean that a can of coke purchased by the company and placed in the office fridge for any employee to drink at any time of the working day would count as a business purpose regardless of if it was during a meeting or just normal office work at their desk? And therefor 100% expense deductible and VAT refundable?


 


Assuming this is the case, can you also confirm that there is no restrictions on what drinks can be drunk other than them not being alcoholic


 


Thanks for the time.

Thank you for your reply..

If it is company policy to provide free tea and coffee including soft drinks etc to all staff, then HMRC would accept this to be an allowable expense as it is for the mutual benefit of all staff. I would group this expense as staff welfare.

My advise would be that commonsense should prevail. I am not aware of any list of allowable and non allowable drinks. Bear in mind, it is still costing you 80% of the total cost.

I hope this is helpful and answers your question.
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