VAT on restaurant receipts

Elaine_Wilson

I would have thought in this case you could claim on the whole bill. It seems to me the bar bill is an integral part of the meal and may even be relating to drink taken whilst eating.

I've had a quick look at the internal guidance manuals and there is no specific restriction about drinks mentioned in the subsistence section. So I think it falls back on what is reasonable. Claiming for a noght downing a dozen pints and no food is not on. But a reasonable amount of drink with a meal will be OK.

So claim the full £2.22, unless anyone else tells you I am wrong.

Petmidget

Ok the format of the receipt isnt the issue here, the receipt is fine, so long as it has a vat number on it.

To claim the vat it has to be a business expenses, end of. HMRC will allow apportionment for mixed use (personal/business).

General rule of thumb, meal and drinks relating to staff travelling away from usual place of work allowable, staff entertaining clients/prospects the element relating to the client is allowable (conversely for tax, go figure), staff party for xmas allowable within limits, general jolly wiht no business benefit not allowable.

The cost and split between food/drink will only be an issue if its excessive.

And lastly, Vat compliance officers wont give a toss about something like this so long as you dont have 100 staff getting tanked up twice a week on expenses.

JasonLVC

From a strict technical perspective - the right to deduct input tax (reclaim VAT in laymans terms) is on the basis that the expenditure is for a business purpose and a valid VAT receipt or invoice is held.

So the rules for reclaiming on food/drinks is that it must have been incurred by the business for a business purpose. If you as an employee/Director make the purchase and then reclaim that cost to yourself back via an expense claim, the expenditure then becomes that of the business thus satisfying the "is it expenditure made by the business" question.

Next question "is it for a business purpose" will depend upon what the meal was for. if you are entertaining a customer, then you can have a proportion of the input tax on the ratio on employees to customers (ie, one salesman and one customer means you can reclaim half the VAT). If this was just a meal by you as a Director and the meal is close to your place of work, then that is probably not allowable.

Finally we get to the question of whether a receipt is sufficient evidence to reclaim input tax.

For receipts from restaurants or local DIY shops, technically you should have a receipt that splits out the VAT somehow (like, an * next to the items that are VATable for instance) or shows the VAT as a seperate item.

In practice, a VAT inspector will usually apply a light touch to these sorts of things. HMRC will want to be sure that where you reclaim VAT, that the supplier has paid the VAT over. So if you just have a scrap of paper with no VAT number on then there is no way of proving VAT has been paid to HMRC.

If you have a receipt that shows the name/address of restaurant, has a date showing, a VAT number showing and itemised bill (ie, food £x, drinks £y) then you should have no problem at all with reclaiming the input tax by doing as simply 3/23 of the total. But without an address/date or VAT number, you cannot reclaim VAT and you'll have to ask for a proper VAT receipt in future.

JasonLVC

Petmidget wrote: »

Ok the format of the receipt isnt the issue here, the receipt is fine, so long as it has a vat number on it.

To claim the vat it has to be a business expenses, end of. HMRC will allow apportionment for mixed use (personal/business).

General rule of thumb, meal and drinks relating to staff travelling away from usual place of work allowable, staff entertaining clients/prospects the element relating to the client is allowable (conversely for tax, go figure), staff party for xmas allowable within limits, general jolly wiht no business benefit not allowable.

The cost and split between food/drink will only be an issue if its excessive.

And lastly, Vat compliance officers wont give a toss about something like this so long as you dont have 100 staff getting tanked up twice a week on expenses.

You got in before me there petmidget - but two posts saying the same thing kind of confirms the responses are right and should be the OP at ease.

Petmidget

tee hee, quicker typer

Any

Thank you Petmidget. That was excellent answer.
Jason - this is big organisation, so believe me not a penny would get paid unless it was for business purpose:-)
I also do know about the "entertainment" and "subsistance" VAT difference (I am ACCA trainee).
I only asked this, because some of the other "proper" restaurant receipts have a proper split, and the VAT is not charged on all of the items. Some items are 0% VAT but it is difficult to say which ones so I cannot work out any rule from this.
So I was just checking.
Thank you

JasonLVC

Have a look on www.hmrc.gov.uk and search for Notice 709/1.

It is all about catering and take away food. I cannot think of too many things that would be zero rated in a restaurant (as serving food is standard rated, simple as that). I suppose the taking away of cold foods like sandwiches would be zero rated, but not any drinks either eaten in/taken away.

I'm CTA/IIT qualified by the way - so we're all in good company!.

Any

Thank you Jason, that is great.
I haven't been able to get straight answer from any of my Finance Directors so far yet, so this is very helpful. Some people might say I am detailist, but I don't like having gaps in my knowledge:-)) Dangerous mine field that:-)