Company account

Vickyxgp

Apologies if this is a silly question.

I have read a million times over that client entertainment can not be claimed against for tax, however, this is a very common practice for creating business opportunities in my field.

Can I pay for the meal on my company card? After all, it is a cost required to make for the business?

Thank you in advance for your help

Pennywise

Yes, you can claim it through your company, but it's not allowable for corporation tax. In tax-speak, it gets added back in the tax computations and corporation tax return.

However, if you've got a valid VAT receipt, you can usually reclaim the VAT on your VAT return (if registered for VAT).

00ec25

Pennywise wrote: »

However, if you've got a valid VAT receipt, you can usually reclaim the VAT on your VAT return (if registered for VAT).

err. I think Pennywise is having a senior moment.

staff entertaining - yes for VAT
business (aka client / non staff) entertaining - no for VAT

https://www.gov.uk/guidance/business-entertainment-and-vat-notice-70065

1.2 Business entertainment and VAT
You cannot recover input tax incurred on the provision of business entertainment expenses.

You can normally recover, as input tax, VAT incurred on goods or services used for a business purpose. However input tax incurred by you on the provision of business entertainment to UK business contacts and non-UK business contacts who are not customers is blocked from recovery under a special legal provision.

Business entertainment is not the same as employee entertainment which is explained in section 3.

You can as he says, pay for the meal with the company card, but the company cannot claim tax relief on that expenditure. The cost is "added back" when doing the corp tax computation

Vickyxgp

Thank you both. That cleared up my question.

Aquamania

Vickyxgp wrote: »

Apologies if this is a silly question.

I have read a million times over that client entertainment can not be claimed against for tax, however, this is a very common practice for creating business opportunities in my field.

Can I pay for the meal on my company card? After all, it is a cost required to make for the business?

Thank you in advance for your help

You will need to speak with those responsible within your company for providing you with a company credit card, or refer to the terms and conditions which should have been provided to you, with regards the use of the company credit card.

In our company, due to the process we use, we are pretty much carefree what the card is used for. That is because we don't pay the credit card bill, but rather the employee submits an expense report (where we don't consider what means was used to fund the purchase), and the employee is essentially liable to settle the card themselves.
(Safegaurds are in place in the event they don't settle up)

I know other companies take a much more strict approach to what may or may not be spent on the company credit card, usually because the company settle the bill directly.