- VAT rules apply to business gifts, meals, and parties
- VAT on business gifts can be recovered as input tax if it is a ‘business gift’
- There is a £50 limit per person within a rolling 12-month period for business gifts
- Business gifts must be made in the course of promoting the business and given voluntarily and unconditionally
- Input tax cannot be recovered on goods given away for non-business purposes
- Services given away for no charge are generally not seen as a supply and no output tax is due
- VAT on hospitality provided for staff is recoverable, but not for non-staff
- Input tax on entertainment for non-staff needs to be apportioned based on the number of staff members present
- There is no limit on the cost of entertaining employees for VAT purposes.
Source: mha.co.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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