Christmas already? A VAT alert
By: Rob Geary Date: 15 November 2017
Our VAT team have put together a list of things to bear in mind when it comes to VAT recovery on seasonal products and services:
- Christmas hampers for employees come under the business gift rules. The value of all gifts given to employees throughout the year needs to be under £50 (net) for the input tax to be recoverable. If you spend more than £50, then input tax can still be claimed, but you will also need to pay output tax – so you may be better off not claiming at all.
- If you want to gift a Norfolk black turkey, as food they will be zero rated for VAT i.e. you will not be charged input tax on purchase.
- If you decide to buy a case or two of wine and hand out a bottle to each of your customers or suppliers you could reclaim the input tax in full, providing each bottle was worth less than £50 and you gave no other gifts during the year.
- Staff party VAT charges can be reclaimed, providing the event is given as a reward to your staff for their efforts during the year. If partners or guests are invited, then an apportionment of the VAT will need to be made.
- Hire of taxis can be subject to VAT at the standard if your supplier is VAT registered. If you hire a minbus (with 11 or more seats) then this should be zero-rated i.e. no input tax should be charged.
- And finally, should you incur legal expenses defending an employee who drove into Santa’s sleigh which was parked illegally outside the pub then you can claim back input tax if the VAT cost is incurred for business purposes. So if your employee was on company business, in a company vehicle and the reputation of the business is at stake then it is likely the VAT will be recoverable.
Please don’t hesitate to contact us
if you have any questions.