Following a recent case, HMRC have changed their stance on the recovery of VAT on the cost of entertaining overseas customers. The block on the recovery of VAT incurred on the cost of entertaining UK customers continues, but if you entertain overseas clients then you can make a claim. HMRC will consider claims for previously restricted VAT in respect of the entertainment of overseas customers over the last four years. If you need assistance on making such a claim then please contact us.

Bear in mind that it is only the recovery of VAT that is affected. The normal tax disallowance of business entertaining as a deduction from your assessable taxable profits will continue, so you will not obtain direct tax relief for entertaining overseas customers.