HMRC has concluded in the light of an ECJ judgment that the UK’s block on recovery of input tax on business entertainment of overseas clients is inconsistent with EU law.
‘The Government intends to amend UK law shortly. In the meantime HMRC will consider claims for previously restricted VAT in respect of the entertainment of overseas customers, as a direct effect of EU law,’ HMRC said in Revenue & Customs Brief 44/10.
‘The block on recovering input tax on entertainment provided to anyone other than an overseas customer, for example, UK customers and non-UK business contacts who are not customers, remains effective and any VAT incurred on the costs of such entertainment cannot be recovered.’
HMRC reviewed its policy following the ECJ judgment in Danfoss A/S and another v Skatteministeriet (Case C-371/07), [2009] STC 701.
HMRC has concluded in the light of an ECJ judgment that the UK’s block on recovery of input tax on business entertainment of overseas clients is inconsistent with EU law.
‘The Government intends to amend UK law shortly. In the meantime HMRC will consider claims for previously restricted VAT in respect of the entertainment of overseas customers, as a direct effect of EU law,’ HMRC said in Revenue & Customs Brief 44/10.
‘The block on recovering input tax on entertainment provided to anyone other than an overseas customer, for example, UK customers and non-UK business contacts who are not customers, remains effective and any VAT incurred on the costs of such entertainment cannot be recovered.’
HMRC reviewed its policy following the ECJ judgment in Danfoss A/S and another v Skatteministeriet (Case C-371/07), [2009] STC 701.
