I have Ltd company clients (directors) who put huge amounts of resturant receipts though their business. (This is of course is ignoring the annual staff party!)
The ones which are obviously for just one person get treated as subsistence and I reclaim the VAT.
The ones that are proper resturant meals for typcially 2-6 people I put through as entertainment but do not reclaim the VAT. I do however disallow the expense for CT purposes when I do the company CT600.
And the large ones arround the time of the directors family birthdays, the ones that have "duplicate" printed on them and the obviously feeding the "teenagers" and their friends on pizza get ignored! The only occassion I have allowed a "takeout" is when someone has a office with staff and can confirm they are all working late and the reason they are all working late - which I ask them to write on the back of the receipt.
Self-employed clients are strictly subsistence only receipts - and it must be easy to tell they have only paid for themselves and no-one else and not at a local pub or restuarant. Otherwise if they instist I include them I either post straight to Drawings, or I post to entertainment and disallow on the tax return.
-- Edited by YLB-HO on Tuesday 13th of March 2012 05:49:57 PM
This area is bit of a minefield. My understanding is that none of these are allowable for input VAT or tax, unless the meals are purchased away from home on a certified business trip (this may be, for example, if your client is in sales, and has to travel away from home and stay overnight to work - buying food down the local restaurant 5 miles away from home is not classed as a necessary expense). I note you mention directors, so there are different rules for directors and employees, see http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000092&propertyType=document
And for employee info
http://www.hmrc.gov.uk/helpsheets/490.pdf
And http://www.hmrc.gov.uk/manuals/eimanual/EIM32566.htm
I was looking at this recently: http://www.hmrc.gov.uk/manuals/eimanual/eim21673.htm , this relates to providing free meals in the workplace. From this, I take it that a small company with directors only can claim free meals at the workplace?
I'm in diffs at the moment with a client who thinks that he can take his wife out for an indian and write it off to the business. Apparently he has friends whose accountant does this for them (when questioned though what accountant, and exactly the circumstances of the meal he was very vague....)
To deal with non-allowable or personal purchases out of the company account, you could post to the owner's drawings account. I usually set up an equity account in QuickBooks for this type of thing.
I would like to add a scenario to those Andy listed below, and get opinions on the way to treat the transaction.
A Ltd Co subcontracts consultants to facilitate training programmes, which are run all over the country. When it is necessary for the consultant to stay at overnight accommodation, the Ltd Co pays the bill for the overnight stay and the evening meal (usually has a drink or two on it).
Bearing in mind these are not employees, my view is that these stays should be at the consultants expense, and factored into their charges, where appropriate, they claim the VAT (many are not VAT registered though). Whereas at the moment the Ltd Co is claiming the VAT.
