Treatment - Two Questions from Me Alcohol

[yorkshirejames]

On the basis that there are some good accountants with various opinions on here, could I have peoples opinions on the validity of a corporation tax deduction and VAT recovery for the following item of expenses:

-a bottle of whisky given to an employee of ours for his birthday

-Four cases of real ale, purchased as christmas presents for clients/prospective clients (so around 50 people.

Thanks in anticipation
James

[bigmedia]

Do people still do that?

Most large corporates would see that as unethical these days. Bribery and all that.

[KidsBeeHappy]

We always give alcohol to traffic wardens at Christmas. Seems to affect their eyesight for months!!

[bigmedia]

At one company I worked at we werent even allowed to recieve gifts from suppliers!

[yorkshirejames]

Do people still do that?

Most large corporates would see that as unethical these days. Bribery and all that.

That is where most of my bottles are going! You'll find that most companies simply ask staff to declare it and then it is fine.

[John Mansley]

On the basis that there are some good accountants with various opinions on here, could I have peoples opinions on the validity of a corporation tax deduction and VAT recovery for the following item of expenses:

-a bottle of whisky given to an employee of ours for his birthday

-Four cases of real ale, purchased as christmas presents for clients/prospective clients (so around 50 people.

Thanks in anticipation
James

Touch and go for the first point - our experience is that HMRC get very twitchy when they see alcohol as an expense, particularly when VAT is reclaimed, and will automatically look to disallow it.

No tax deduction is available for client entertaining so the second point would be a definite no I would think.

[bigmedia]

Most of my client meetings are based around having a quick beer and/or meal (music business). Are these tax deductable? I'm a sole trader and am not VAT registered. Sorry to hijack, but I thought if I'm working (drunk or not) then my expenses are allowable.

[John Mansley]

Nope! HMRC would argue that it's a personal choice to conduct meetings in pubs and bars (even though the meeting place may be dictated by the client).

[bigmedia]

I'm surprised at that, and I'd struggle to fit a full live band in my office!

[RAL]

I agree with Jonathan on


-a bottle of whisky given to an employee of ours for his birthday


This could come under trivial gifts. As long as you do just one a year.
Tax deductible Yes, VAT claimable Yes.


-Four cases of real ale, purchased as christmas presents for clients/prospective clients (so around 50 people.

Thanks in anticipation
James

Client entertainment. Not deductible for the tax and you can not claim vat either.

Unless you produce them...

[yorkshirejames]

Most of my client meetings are based around having a quick beer and/or meal (music business). Are these tax deductable? I'm a sole trader and am not VAT registered. Sorry to hijack, but I thought if I'm working (drunk or not) then my expenses are allowable.

So many different opinions - very good!

I would say that if the beer or the meal are incidental to your meeting then you can claim. For example I often do meetings in Caffe Nero - and my monthly expenses will always include several receipts for coffee. If your meeting happens to be in a place that sells alcohol and you decide to get a bottle of beer instead of a coffee, then I don't see a problem. I suggest that this is distinct from entertaining - as the food and drink are incidental to the meeting. If on the other hand you took him to a fine dining restaurant/a beer festival/spearmint rhino then this would be entertaining, where entertaining was the main purpose of going there - distinct to a meeting place where the meeting is the main event.