{"id":2669,"date":"2019-09-10T12:03:00","date_gmt":"2019-09-10T12:03:00","guid":{"rendered":"https:\/\/way2vat.com\/?p=2669"},"modified":"2022-11-02T19:31:20","modified_gmt":"2022-11-02T19:31:20","slug":"when-can-you-reclaim-vat_gst-on-your-christmas-party","status":"publish","type":"post","link":"https:\/\/way2vat.com\/when-can-you-reclaim-vat_gst-on-your-christmas-party\/","title":{"rendered":"When can you reclaim VAT\\GST on your Christmas party?"},"content":{"rendered":"

Your office Christmas party is one of the highlights of the year, but it can cause a headache that has nothing to do with how much you drink, and everything to do with tax. VAT\\GST reclaim for your Christmas party and other entertainment can get extremely complicated. Completing the VAT\\GST return correctly means keeping track of many different factors, as well as the total you\u2019re requesting for a VAT\\GST refund.<\/p>\n

Claiming a VAT\\GST Refund for Business Entertainment<\/h3>\n

In the UK, there\u2019s a block on local VAT\\GST reclaim for business entertainment expenses. That means, for example, that you cannot claim a VAT\\GST refund on entertaining a highly valuable potential client in your priVAT\\GSTe box at Wimbledon, even though these are business expenses.<\/p>\n

The block on VAT\\GST refunds for business entertainment extends to any type of entertainment, like tickets to sporting events or concerts, food (strawberries and cream during half time), transportation (taxi ride to the tennis courts), or hospitality (overnight hotel accommodation nearby), for anyone who is not an employee.<\/p>\n

Claiming a VAT\\GST Refund for Employee Entertainment<\/h3>\n

The good news is that employee entertainment is exempt from this local VAT\\GST refund block. HMRC realises that meals, parties, and trips are a vital part of keeping your employees motiVAT\\GSTed, making them integral business expenses. That means that your office Christmas party for employees is VAT\\GST-refundable, including food, drink, entertainment, and taxis to get everyone safely home late at night.<\/p>\n

However, it\u2019s not always straightforward. There are a few requirements for your employee entertainment to qualify for a VAT\\GST refund:<\/p>\n

1. The event is for employees only<\/b><\/p>\n

That means that it doesn\u2019t include your employees\u2019 partners, or company shareholders, because they are not employees. If anyone attends who is not an employee, you\u2019ll have to calculate which percentage of the total cost was spent on your employees, and how much for non-employees.<\/p>\n

Then you\u2019ll only include the amount of VAT\\GST spent on employees on your VAT\\GST return. You\u2019ll need to be very careful to indicate how much of the total VAT\\GST is for employees, and how much for non-employees.<\/p>\n

2. The cost per head is under \u00a3150<\/b><\/p>\n

The exemption that allows you to request a VAT\\GST refund for employee entertainment has a cap of \u00a3150 per head, per year. That means that you can include both your Christmas party and your end-of-summer office barbecue on your VAT\\GST return, as long as the combined costs per head stay under \u00a3150.<\/p>\n

3. It\u2019s available to all employees<\/b><\/p>\n

Your employee entertainment has to be open to all your employees. If you have an exclusive event that\u2019s only for the directors and\/or partners, you can\u2019t make a VAT\\GST reclaim on the costs of the event. But you can submit a VAT\\GST return for an office-wide party that includes both employees and directors\/partners.<\/p>\n

4. The food isn\u2019t for sustenance<\/b><\/p>\n

If you provide sandwiches and drinks for everyone so they can keep their focus during a long meeting, that doesn\u2019t count as employee entertainment. It\u2019s considered sustenance, so you can\u2019t include it on your VAT\\GST return.<\/p>\n

Similarly, you also can\u2019t reclaim VAT\\GST on the salad that your employee grabs on the way from your Liverpool Street office to a meeting nearby. This type of food costs is only eligible for a VAT\\GST refund if the employee is more than 50 miles away. So meals that your employees pay for while in Paris for a conference are eligible for VAT\\GST reclaim, but meals they pay for while in Canary Wharf at a conference are not eligible.<\/p>\n

VAT\\GST Reclaim for Employee Entertainment Overseas<\/h3>\n

Claiming a VAT\\GST refund on your Christmas entertainment only gets more challenging when you\u2019re operating across different VAT\\GST systems in various EU member states. The rules regarding VAT\\GST reclaim for Christmas parties changes in just about every country. For example:<\/p>\n