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VAT on business entertainment - overseas client entertainment

We reported in a blog on 26 Feb 2009, on an ECJ case decision which had cast some doubt over the UK’s treatment of VAT on business entertainment.

Following this decision, HMRC are considering the issue. In the meantime, they have issued a statement which invites businesses to consider making historic VAT refund claims for UK VAT paid on overseas client entertainment.

Prior to 1988, VAT was recoverable on overseas client entertainment. From 1988 , such VAT was blocked. As such, under the terms of the recent Conde Nast/Fleming decisions, claims can now be submitted for the period 1988 to 1997. The deadline for such claims is 31 March 2009.

HMRC have also said that in their view this decision does not affect VAT on UK client entertainment. This remains to be seen and it is likely that there will be further litigation on the matter.



Date: 18th March, 2009
Author: Jane Stacey


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