V6.179 VAT recovery and other practical points for caterers

Part V6 Business by business

V6.179 VAT recovery and other practical points for caterers

V6.179 VAT recovery and other practical points for caterers

The VAT recovery position of caterers will ultimately depend on the liability of the supply made. Where the supply made is taxable either at the zero or standard-rate (or the temporary reduced rate), VAT recovery will be normally be available on costs incurred. Where an exempt supply is made, VAT recovery will generally be unavailable unless it falls within the partial exemption de minimis limits (see V3.465). For a full discussion of VAT recovery, see Division V3.4. For the liability of caterer's supplies, see V6.178.

VAT recovery on catering supplies to employees

As described at V6.178, VAT may or may not be due on the provision of catering to employees. Irrespective of whether VAT is chargeable, the provision of food and drink to staff is a taxable supply with the result that VAT on related costs is recoverable (see V3.446 for discussion).

VAT recovery on free catering for customers and friends

Free meals or drinks provided for customers or friends are likely to be classed as business entertainment and input tax incurred on such supplies is not available for recovery under the rules described at V3.446.

VAT recovery on motor vehicles and fuel

Caterers may incur VAT on both motor vehicles and fuel. Input tax on the purchase of a commercial vehicle (ie not a car) will normally be recoverable when it is purchased in the course or furtherance of a taxable business. For VAT recovery in respect of motor cars, see V3.443. For VAT recovery

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