Recoverable VAT expenses

PHudsonTudor

If a company holds a sales events attended by customers to promote business and network then the entertainment (food, drink, facility costs) are non-recoverable for VAT but what about the other costs only and specific to that event such as advertising, printing of material, digital marketing, filming, photography, rental of stands, are these expenses still classed as business expenses and the VAT recoverable or as they are only and specific for this event would they be classed as entertainment expenses and VAT non-recoverable?

MarieNoelle

I would say these are advertising and marketing expenses.

Input VAT is restricted only on the free provision of any hospitality to persons who are not employees. From the VAT Manual:

For VAT purposes entertainment can take many forms. Here are some examples of costs which are regarded as entertainment or the provision of hospitality:

• the cost of giving away food and drink;
  
• the cost of giving away accommodation, for example in hotels;
  
• the cost of giving away theatre and concert tickets;
  
• giving free entry to sporting events and facilities;
  
• giving free entry to clubs, nightclubs etc;
  
• using yachts and aircraft to entertain
  

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