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19th December 2013
It is that time of year again when we all get a bit muddled
about what VAT we can and can't reclaim.
At this time of year many buy their valued customers Christmas
presents, whether this is a box of chocolates or a nice bottle of port.
Whatever you buy your clients this Christmas, make sure that you
remember the rules regarding VAT and gifts.
You can recover the input VAT on Christmas gifts for your
clients, however, remember…
…if the cost of the gift (plus the cost of any other gifts in
a 12 month period) is in excess of £50 you must account for VAT on the
total cost value of all the gifts.
If you provide a Christmas party to reward your employees then
this is considered to be a cost incurred for business purposes so you
will be able to reclaim back the VAT. However, remember…
…if staff can bring their partners or clients can attend then
this is not a business purpose and the VAT is not recoverable. If you
make a nominal charge to partners or clients to attend then the VAT
will still be recoverable provided that output VAT is accounted for on
the charges made, an alternative would be to apportion the VAT recovery
on costs to take into account the element that is not staff
We hope that our brief overview helps, of course if you have
any questions or specific scenarios that you want to pass by us, please
do not hesitate to give us a call on our free helpline.
About the Author
VAT People are leading VAT and Customs Duty
consultants based in the
North West of England. We work with a wide range of businesses
throughout the UK as well as assisting our accountancy colleagues to
unravel the thorny VAT issues for their clients. We are one of the UK's
largest and most comprehensive sources of VAT and Customs advice, our
consultancy team having over 140
years of experience in VAT and Customs
gained in either HMRC or a Big 4 accountancy practice environment.
Call us on our VAT helpline 0800 077 4604 to discuss. All initial discussions are free with no-obligation.
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Article Published/Sorted/Amended on Scopulus 2013-12-27 15:11:14 in Tax Articles