Staff Lunches

HadynB Registered Posts: 38 ? ? ?

I'm can't make out the specifics in the VAT guide so hoping someone here has had some experience. Are you able to claim the VAT back on refreshments/lunches for your employees during business meetings. One of the directors travels around to our various reps around the country to conduct reviews etc and are normally held in Costa's etc.

Are you able to class these as subsistence and claim it as both a tax deductible and VAT deductible expense for both employees? I know the obvious ruling on evening meals but think the whole lunch time/refreshment thing is debatable.

Thanks in anticipation.


  • SashaDella
    SashaDella Registered Posts: 362
    We claim back on out staff lunches where I work...
  • TinaW
    TinaW Registered Posts: 5 New contributor ?
    I went on a VAT course last week and was told that if it is just employees that you are paying for it can be justified as team building but if it is customers etc then it is entertaining
  • HadynB
    HadynB Registered Posts: 38 ? ? ?
    Thanks for your replies.

    I did a bit more research and I thought I had it but it's may be more difficult than I thought:

    Staff lunches/refreshments whilst away from the workplace are eligible for claiming VAT as either subsistence or entertainment, but if the cost is classed as entertainment, as you mention, it will become liable, to Tax and NI. On the VAT course you mention, did they say what would class as subs and what is entertainment as on the one hand, the director is travelling from their normal place of work (subs) but the rep is in their area (ent). It wont affect the VAT but we do have a PSA so I need to make sure I'm treating them correctly.

    Before I took over all the expenses were classed as entertaining and no VAT claimed but think the company could benefit from claiming the VAT back at least?
  • payrollpro
    payrollpro Registered, FMAAT Posts: 427 Dedicated contributor ? ? ?
    Hi there,

    Everyone is right and your own research really makes it clear. An event of some sort could actually be a combination of subsistence (exempt, but only if you have a dispensation and VAT back), staff entertaining (VAT back but P11D) and external entertaining (No VAT but no P11D) all in the same meal!

    The key is making sure you have a full list of every one present and what their purpose was. You also need to know if the business is going to waive its right to claim external entertaining against CT in which case the employee who hosts and pays for it has no P11D liability, otherwise the business gets the CT relief but there is a P11D liability or PSA instead.

    It is not a straightforward situation to consider.

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