I have just joined a business which provides employees with free sandwiches (£2) every day and also once a week provides free meals for 10 non employees. It is a sport club so visiting team etc.
Currently for staff meals they Cr catering sales £2 and dr staff costs £2 (The actual costs having already been charged to catering costs)I intend to Cr Catering costs and debit staff costs £2
For weekly meals they Cr Catering sales say £100 Cr Vat liability £20 Dr Hospitality cost £120. The actual cost of food provided is probably £50 and has already been charged to Catering costs.
I intend to Cr catering cost £50 Dr Hospitality £50.
Do we think this OK? And should I be reclaiming VAT from previous years?
I have spoken to VAT helpline if anyone is interested (though it does not look like it!!)
Even though meal provided for non employee is free there is still a taxable supply and full amount of vat (ie standard vat on normal sell price) is due.
Seems wrong to me but hey
So just in case someone needs to know in future there it is.
Hi Richard, welcome to the forum. I see nobody has answered your post, don't be put off by this as it'll be due to bad timing, and remember that your questions and answers will probably be of some value to a future member as you rightly pointed out, so it was well worth posting. VAT seems to be a little bugger of a subject. Glad you found your answer.
Neil.
-- Edited by Spamkebab on Thursday 5th of April 2012 07:04:42 AM
-- Edited by Spamkebab on Thursday 5th of April 2012 07:57:01 AM
Welcome to the forum Richard and my sincerest apopologies fror not welcoming you sooner.
Thanks very much for the information which will stay here on record to help people who hit a similar situation in the future.
The issue with this site is that many of the regular contributors are also full time working in practice and someimes you can hit perfect storm scenario's where everyone is busy.
I've been on here a few times over the last few days but I'm sure that you've seen the size of my replies and it just ends up that I give one answer then I'm off again.
Yesterday I was actually free for most of the day but lost the internet for a fair chunk of it meaning that the site had a Spam attack that wasn't quashed for almost four hours!
Anyway, if I see a post from yourself again your now earmarked as a reply first case. Many appologies again for the poor welcome that you've received to the site which is genuinely a really welcoming place most of the time to all newcomers.
kindest regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
