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Can I claim VAT on entertainment?

This a more complicated area and is often confusing, so we have developed a dummy's guide to claiming VAT on entertainment. 

Answer the following: 

1. Was the food or drink purchased with a client, supplier, sub-contractor, prospective client or supplier, or anyone else who is not an employee of the business? 
YES - not recoverable
NO - go to Q2

2. Was the food or drink purchased away from your normal place of work?
YES - VAT recoverable
NO - go to Q3

3. Was the food or drink purchased for the purposes of entertaining employees (and the benefit of this will be reported for PAYE purposes)?
YES - VAT recoverable
NO - VAT not recoverable.

When VAT is not recoverable it outside the scope of VAT and therefore won't form part of the UK VAT return. 

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