BUSINESSES HAVE BEEN given a boost by the European courts after a judgement allowing VAT refunds on overseas client entertainment.
However the taxman’s interpretation of the judgement narrows the potential amount which businesses can claw back.
John Voyez, VAT director at Smith & Williamson, said that the taxman’s stance on the European Court of Justice (ECJ) decision, meant a number of hurdles had been put in claimants’ paths.
Companies can potentially reclaim VAT costs on four years’ worth of funds splashed out on overseas clients – but not for outings to nightclubs or golf days.
The ruling will particularly affect investment banks who often entertain overseas guests at nightclubs where bills can run up to thousands of pounds in bar tabs.
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