Ever wondered what you can claim back when entertaining staff, customers or clients?

Ever wondered what you can claim back when entertaining staff, customers or clients?

Taking an existing or potential customer or client out for a meal can be a great way to establish a strong healthy relationship. Just as much as keeping staff morale high by organizing staff nights is a great way to keep the business running smoothly and ensuring healthy relationships all around.

But what exactly can you claim back as a tax-deductible expense?

Entertaining Potential Or Existing Clients

Can this be claimed as a tax-deductible expense? The short answer is no. This type of expenditure is disallowed from calculating taxable profits by the tax acts. These business entertainment expenditures include food, drinks, accommodation events etc.

What this means is that although it can be claimed as a legitimate business expense, providing it meets the guidelines, it can’t be taken off your profits when completing your tax return.

If you are a sole-trader it can’t be claimed as an allowable expense either.

Staff Entertainment

Provided it’s just for staff and directors your staff party is considered a deductible tax.

You can also give your staff members a gift of up to €250 in vouchers tax-free!

What About Gifts?

VAT and non-food/entertainment can be a little complex. If the gift is of the nature of something that is usually allowable as VAT on purchases in your VAT return you can reclaim the VAT.

If the gift is not of this nature and is considered to be a supply or sale for VAT purposes. The supply is deemed to be of the same value as the cost of the gift, therefore canceling any VAT advantage.  

However, there is one exception.  If the VAT exclusive value of the gift does not exceed €20, then the supply will not be a supply for VAT purposes but the VAT on the purchase can be reclaimed.