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.
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.
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!!!