In a recent Dutch VAT case (which was taken to the ECJ), the Advocate General suggested that the VAT blocking on Business Entertainment expenditure could only apply to categories of goods and services that are "adequately defined" in local legislation.

UK legislation is similar to Dutch legislation. Consequently, if the ECJ follows the Advocate General's opinion (which it usually does) we should be able to recover the VAT incurred on business entertaining retrospectively (subject to the 4 year cap).

While the Advocate General gave his opinion on 28th January, it may be some time before the final decision of the court is released. To protect your retrospective position and maximise the amount of recoverable VAT, you should submit a protective claim to HMRC as soon as possible.

This is particularly relevant if you have received a VAT assessment for business entertainment costs or have not recovered VAT in this area in the last 4 years.

We have a great deal of experience in submitting protective claims and would be happy to assist you.

If you would like more information on this please contact our VAT partner Scott Craig in the first instance. Please feel free to contact the Scott Moncrieff VAT Team if you would like to discuss this or any other VAT issues:

Edinburgh
Scott Craig: scott.craig@scott-moncrieff.com
Alan Glen: alan.glen@scott-moncrieff.com
Iain Masterton: iain.masterton@scott-moncrieff.com
Tel: 0131 473 3500

Glasgow
Greg McNally: greg.mcnally@scott-moncrieff.com
Anthony Cochrane: anthony.cochrane@scott-moncrieff.com
Tel: 0141 567 4500