This document discusses this in detail, together with its VAT treatment; entertaining overseas customers; corporate hospitality events; dual use; the exceptions; disposal of goods used for business entertainment; staff entertainment including the detail on who is and who isn't an employee.

This guidance note provides an overview of the VAT treatment of business entertainment expenses.SI 1992/3222, Article 5 (subscription sensitive); VATA 1994, s 25(7)

For a flowchart containing details of when VAT is recoverable on entertaining expenses, see Flowchart - claiming input VAT on entertaining expenses.

For a discussion of case law relating to this topic, see the Business and staff entertaining - relevant VAT case law guidance note.

What is business entertainment?


Entertainment is deemed to be business entertainment if all of the following conditions are satisfied: HMRC Notice 700/65; De Voil Indirect Tax Service V3.446 (subscription sensitive); VIT43200;2006/112/EC, Article 176; VATA 1994, s 84(4)(c)

  1. entertainment is provided to individuals who are not employees of the business
  2. it is provided completely free of charge

Please see below regarding the provision of entertainment to overseas customers.

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