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Christmas VAT


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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.

Christmas Gifts

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.

Christmas Parties

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 entertaining.

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

The 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

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