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Post Info TOPIC: Restaurant tips as expense


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Restaurant tips as expense
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Can anyone tell me if you can claim tips that you give, say after a business lunch, as a business expense. I know they aren't vatable but wondered if they are still classed as a business expense.

Thankyou

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D Brown


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My feeling would be no - they're not claimable.
Business expenses are those you make which are wholly and exclusively for the conduct of the business. I think the tax man would argue that it's entirely up to you whether you spend your money on tips or not; the business won't go backwards if you decide not to tip.

Maybe I'm just feeling scrooge-like today, but that's what I'd expect her to say.


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Andrew
gbm


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Hi Dawn,

You mentioned about being VATable - this is irrelevant as you can't claim VAT on entertaining anyway.

You don't get tax relief on entertaining either, which always seems to come as a big shock to clients!


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gbm wrote:

Hi Dawn,

You mentioned about being VATable - this is irrelevant as you can't claim VAT on entertaining anyway.

You don't get tax relief on entertaining either, which always seems to come as a big shock to clients!




Its the hardest thing to explain to a client! Especially when they say it is the only way they can get a customer.



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HendyPhilhendy wrote:

 

gbm wrote:

Its the hardest thing to explain to a client! Especially when they say it is the only way they can get a customer.


The tax man will doubt that it's the only way; I kind of agree, too.

But the way to recoup any disallowable costs of getting clients is to add the cost back into their fees. It's very simple.

 



-- Edited by AICB on Saturday 29th of January 2011 12:32:11 PM

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Andrew


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gbm wrote:

Hi Dawn,

You mentioned about being VATable - this is irrelevant as you can't claim VAT on entertaining anyway.

You don't get tax relief on entertaining either, which always seems to come as a big shock to clients!



Although you can get tax relief for staff entertain, should you have any.

 



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Thanks for the replies. I appreciate you cant claim vat for entertaining clients but for staff xmas parties you can. It was just whether the tip counted as part of the expense. I have been told that it can count towards the yearly amount allowable per employee as staff entertaining. These vat rules can get very complicated!!!

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