YEE-PEE! UK tax man to pick up tab for years of corporate jollies

Defence firms, drug makers and other exporters that have spent millions on entertaining foreign clients stand to gain windfall payments from the Treasury following an EU VAT ruling.

VAT paid over the last 12 years on everything from plush hotel rooms to extravagant dinners and even private jets and boxes at Wimbeldon could be reclaimed.

The ruling is a bitter blow for the Treasury and follows the publication of ONS figures yesterday which showed that public sector debt has hit new records as tax revenues have fallen.

Until now entertaining foreign clients was not thought to be VAT exempt. But the European Courts have now ruled this illegal, opening the floodgates to rebate claims against the tax man that could see hundreds of millions of pounds leave the Treasury coffers at a time when it is desperate to retain cash.

A number of FTSE 100 companies are understood to be working on claims for expenses dating back to 1988 which have to be submitted to HM Customs and Excise before 30 March to claim the full amount.

Marc Welby a senior tax Partner at BDO Stoy Hayward, says he is in the process of lodging claims for a number of his clients.

"It is a simple exercise and the company only needs to demonstrate what it spent in VAT recently," says Mr Welby who points out that this means there is no requirement for receipts to claw back any of the cash.

The rebates for corporate hospitality could prove controversial. There has always been a thin line between entertaining clients and bribery and corruption.

Bae Systems became embroiled in controversy following allegations that it spent millions of pounds on excessive hospitality.

Corporate hospitality flourished under the excesses of the M&A boom, with companies spending seven figure sums courting overseas customers.

It recently emerged that dozens of senior civil servants had accepted lavish corporate hospitality from defence companies, IT firms and contractors.

"How the Treasury will afford this remains unclear," said Mr Welby.

http://www.telegraph.co.uk/finance/4700345/Tax-man-to-pick-up-tab-for-years-of-corporate-jollies.html

YEE-PEE! UK tax man to pick up tab for years of corporate jollies

YEE-PEE! UK tax man to pick up tab for years of corporate jollies

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