A recent ruling by the EU Advocate General on the laws concerning the block on reclaiming VAT for business entertainment may be highly beneficial for UK businesses.
The ruling found that the laws of some EU companies were too vague and that they should state what types of goods and services are applicable. Whilst the decision needs the backing of the European Court you may be pleased to know that court doesn’t usually disagree with the Advocate General.
The potential effect of the decision is two-fold. Firstly it may make it easier to reclaim more VAT from business related entertaining costs on an ongoing basis. Secondly it may make it possible to make retrospective VAT claims on business related entertainment going back up to 4 years.
We are waiting for the final verdict of the European Court before we start advising clients to put their claims through, and HMRC will no doubt have something to say on the subject. Let’s keep our fingers crossed and hope for a rare victory for the tax payer!
If you have any issues regarding VAT on business expenses then just give us a call on 01384 235549 and we’ll be delighted to talk them through with you.
Lewis Smith & Co. – Company secretarial services for Stourbridge, Kingswinford and Dudley