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VAT on Business Entertaining
I have looked through the other items ref business entertainment and they seem mainly to deal with the corporation tax angle.
"Business Entertaining" sits under the header "Normally VATable expenses" in the drop-down, but I think VAT is disallowed on entertainment?
Having looked in the accounts, it looks like FAC doesn't actually reclaim the VAT so it would appear to work correctly? But is it under the wrong heading or is this on purpose?
"Business Entertaining" sits under the header "Normally VATable expenses" in the drop-down, but I think VAT is disallowed on entertainment?
Having looked in the accounts, it looks like FAC doesn't actually reclaim the VAT so it would appear to work correctly? But is it under the wrong heading or is this on purpose?
I’m mildly confused
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Inappropriate?Frans,
Yes, it's not very clear.
But VAT is normally charged on the Business Entertaining you spend money on, so strictly speaking it is 'VATable'. When you look at the receipt there is VAT involved.
FreeAgent's concept of VAT-disallowable expenses isn't very transparent, I agree. We could probably explain the details of the better. -
Inappropriate?Related to this:
Business entertaining costs don't seem to appear on the VAT return at all. Shouldn't the gross cost appear in box 7?
Appreciate this doesn't change the actual liability, but I've got a client that's currently transferring from another bookkeeping system, and I noticed this whilst reconciling differences between the suggested VAT figures from both. -
Inappropriate?Hi Chris,
You are quite right - I've just checked the HM Revenue website and this cost should indeed appear in box 7. It's only items that are outside the scope of VAT which shouldn't appear here.
I've made a note of this to ask our technical team to have a look at it. Many thanks for bringing it to our attention.
Kind regards,
Emily
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