Customer entertaining (hospitality box)

Customer entertaining (hospitality box)

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I'm sure this quesiton has been asked before but a search reveals no matches.

Client is looking to hire a corportate box at a football ground for the coming season. This will primarily be to 'entertain' clients but also to a lesser extent suppliers, employees (and me hopefully) etc.

As the main purpose is that of client entertainment i assume that this is neither tax dedcutable nor Vat reclaimable? Cann someone confirm. For what is a relatively small LTd co having to add £19,000 back into the tax calc would have a not insignificant effect on their tax bill!
Nureyev

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By AnonymousUser
04th Jan 2007 15:57


If "a search reveals no matches" why pay £19,000 for a hospitality box? Nothing to see here. Move along.

By the way, I agree with you re non-deductibility and disallowed VAT.

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By User deleted
04th Jan 2007 18:46

Depends
Doesn't the outcome depend on the conditions for the use of the box?

If it's only available during matches, then it will be entertainment and disallowed. However, I recall a case where the box could be used at any time during the week for business meetings (and in the case that I'm thinking about was used regularly). On that basis, if my memory is correct, the decision was that the "rent" was only disallowed for those days where there was a match, perhaps 25/365.

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By User deleted
05th Jan 2007 10:58

Ah good point...
Thanks David for bringing that to my attention.

The box in question can indeed be used on non match days for meetings, training etc. and although it may not happen regularly, i'm sure on various occassions throughout the season it will be used for such purposes.

Only having to dissallow a small proportion (i.e 25/365) would have a significant impact on this company in terms of vat/CT. I guessed there may be some kind of 'loophole' or its difficult to see how at nearly £20k a time such forms of entertainment could ever be viable.

I may clear this with HMRC before we proceed.

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