What is entertaining?

by **Incredulum** on Tue Oct 18, 2011 12:21 pm

Sandwiches provided to third parties who happen to be in meetings that take long enough for lunch to have to be provided obviously do not constitute entertaining for corporation tax purposes. What about VAT, can input tax be reclaimed?

CT reference here. http://www.hmrc.gov.uk/manuals/bimmanual/bim45045.htm

by **AvocadoK** on Tue Oct 18, 2011 9:47 pm

I don't know a lot about VAT, but aren't sandwiches zero rated?

You might be interested to read the permanent secretary, Dave Hartnett's comments about hospitality, given to the Treasury sub-committee at http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/uc1371-iii/uc137101.htm

Dave Hartnett: I have been to a supper with Goldman Sachs. I would not call it corporate hospitality from them.

So presumably Goldman Sachs won't be adding it back (and will claim back the VAT!!!)

AK

by **Incredulum** on Wed Oct 19, 2011 12:06 pm

A fair point, but the crisps and fizzy drinks etc. etc. are not (I think).

by **towat** on Wed Oct 19, 2011 4:02 pm

Sandwiches provided in the course of a catering supply, i.e. on a platter are standard rated.

Personally I would happily reclaim the VAT without losing any sleep over it.

by **Generix** on Wed Oct 19, 2011 5:19 pm

towat wrote:Sandwiches provided in the course of a catering supply, i.e. on a platter are standard rated.

Personally I would happily reclaim the VAT without losing any sleep over it.

Pretty sure the platter doesn't make them standard rated.

by **towat** on Thu Oct 20, 2011 9:27 am

Pretty sure the platter doesn't make them standard rated.

That is specifically one of the indicators of catering supply as defined in VFOOD4140 - Excepted items: Catering: What is catering:-

"Is there an element of service provided to the customer? This could vary from a full waiter / waitress service to simply laying out sandwiches on a platter. The more significant the level of service, the more likely that the supply is that of catering."

Which is why I mentioned it, simply buying a platter of sandwiches from a supermarket does not constitute a catering supply (Safeway Stores [1997] STC 163) but asking your local sandwich shop to provide a buffet or sandwiches on platters for instance does, and is standard rated.

by **Generix** on Thu Oct 20, 2011 9:51 am

towat wrote:
Pretty sure the platter doesn't make them standard rated.

That is specifically one of the indicators of catering supply as defined in VFOOD4140 - Excepted items: Catering: What is catering:-

"Is there an element of service provided to the customer? This could vary from a full waiter / waitress service to simply laying out sandwiches on a platter. The more significant the level of service, the more likely that the supply is that of catering."

Which is why I mentioned it, simply buying a platter of sandwiches from a supermarket does not constitute a catering supply (Safeway Stores [1997] STC 163) but asking your local sandwich shop to provide a buffet or sandwiches on platters for instance does, and is standard rated.

I thought there were several cases which now defeated the 'platter test', I recall one of the arguments being (in at least one of the cases) that the 'platter' was required to deliver the food or something along those lines. It was one of the delivered goods versus catering cases I think. Although its been two years since I did anything other than looking at retailer discount /promo charges/credits to wholesalers re food, so maybe the position has changed again? (or maybe the case I was thinking of is only a trib case - I'll try and find it)