Q&A: reclaiming VAT on corporate hospitality drinks

In this week’s Q&A, AJ, tax adviser at Croner VIP Tax Team, explains the unusually complex rules on whether input tax can be reclaimed on alcohol provided at a corporate entertainment event

Q. My client provides complimentary alcohol for ‘free’ as part of their supply, can they recover input tax on the alcohol?

A. At first glance, the answer appears straightforward. The hospitality is seemingly provided for free – meeting the definition of business entertainment, thus the input tax would be blocked.

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