BIM31555 - VAT: business entertainment

The VAT borne on business entertainment expenditure is not to be deducted as input tax. The VAT definition of business entertainment is modelled on the IT etc. definition in ICTA88/S577 ( BIM45000 onwards). You should ensure that the cost of any business entertainment disallowed under ICTA88/S577 includes the amount of the VAT related to it.