In general, you can claim any expenses incurred entirely and exclusively for the purposes of the business. Those expenses can be pre-trading expenditure, cost of goods bought for resale and raw materials used in business, general business running expenses, employment related costs, motor and traveling expenses, use of home for work.

You can only reclaim the VAT on the proportion of your expenses that are not used for the business entertainment and are used for the business purposes.

If you provide entertainment to reward your team for good work or to maintain and improve staff morale, this is considered to be for business purposes and so you can claim back the VAT.

Generally, the VAT cannot be recovered on the business entertainment expenses. It makes no difference whether the person being entertained is an existing customer, a potential customer or any other person who is not an employee.

Download by bookkeeping checklist for new clients as a pdf.