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Take the hassle out of business entertaining
Entertainment is a crucial aspect of building and maintaining relationships with your customers, suppliers and staff. But up until now, managing the expenses that arise when entertaining has been a frustrating task.
Prepaid cards revolutionise entertainment expenses, making it easy for businesses of any size to track and control spending. Here’s how.
Individual cards increase accountability. You can give prepaid cards to anyone in your company that needs one, for funding company outings, entertaining clients or more.
Simplify expense reporting
Prepaid cards automatically track who’s spent what, so there’s no detective work needed to reconcile transactions. With Soldo, you can even integrate your expenses with your accounting solution.
No credit checks needed
There’s no credit involved with prepaid cards, so your staff won’t need to pass any checks to get one. And there’s no risk of them driving up debt as they spend.
Prepaid cards can be used just like credit or debit cards. Soldo’s contactless Mastercard® cards, for example, are accepted in over 150 countries – by more than 20 million merchants.
Business entertainment VAT: what are the rules?
One potentially tricky aspect of managing entertainment expenses is determining whether you’re allowed to claim VAT or not. According to HMRC, the main determining factor here is who you’re entertaining.
VAT on staff entertainment
Most costs incurred while entertaining your staff are eligible for VAT refunds. It doesn’t matter if it’s the annual Christmas party, or a one-off event to boost morale or celebrate a job well done – you should be able to claim VAT.
HMRC has strict rules on who counts as an employee, though. Subcontractors, shareholders and former staff don’t count.
Staff entertaining may also be eligible for further tax relief. But it has to be an annual event, open to all staff and cost less than £150 per head to qualify.
Client entertainment VAT
Any costs incurred while entertaining clients or customers are ineligible for VAT relief. Whether you’re taking them out to lunch or planning a golf day, you’ll have to cover the VAT yourself.
But lots of events will see clients and staff overlap. In these cases, you can only claim VAT on staff expenses – which can make keeping track of your taxes tricky.
Soldo’s prepaid cards make the whole process simple, and come with a host of other benefits: including real-time tracking, advanced spending controls and more.
Access Soldo’s advanced business entertainment expense features
5 stars – Soldo is a product that really delivers. Delivers on value and delivers on its promises.– Dennis Koehler, Global Head of Payment & Fraud, GetYourGuide
Soldo is more than just an entertainment card: you can set up accounts for travel expenses, employee benefits, online subscriptions, supplies reordering and more. But even if you’re solely using our cards for managing entertainment spend, you’ll be able to gain control and save time.
Soldo’s automated expense management features make it quick and easy to log all the transaction information you need to prepare for VAT.
Our business expense cards collate all of your entertainment budgets into a unified company-wide report, taking all of the stress out of claiming VAT on staff entertainment.
You can set rules within your account dashboard to track and separate VAT-exempt spending charges automatically, so your finance team needn’t stress themselves out when the taxman comes calling.
The moment someone in your team spends using their Soldo card, you’ll see the transaction appear in your web console. Plus, you’ll be able to see which card was used – giving you complete oversight of who’s spending what.
That level of visibility eliminates risk from your entertainment expenses. With company credit cards, finding out who extended the bar tab once you’ve seen the bill can be almost impossible. With Soldo, you’ll know immediately.
If a transaction looks out of place, Soldo will notify you instantly. And you can disable any card at the click of a button.
The morning after a night out entertaining clients or some well-deserved after-work drinks, the last thing your team wants to do is sort through their crumpled receipts and file them for expenses. With Soldo, they won’t have to.
Our smart tracking features enable your team to capture their receipts instantly with their phone camera at purchase. The Soldo app recognises the charges and files them away automatically, logging all the information your finance team needs.
Soldo gives you complete control over staff spending, so there’s no risk of misuse or overspending.
It helps you control how much your staff are spending – and on what – while also empowering them to entertain clients and build fruitful relationships. From your central online account dashboard you can set:
- Spending budgets for specific periods
- Maximum spend levels for individual purchases
- Specific card activation dates
- Categories of permitted purchases
You can track all individual purchases instantly, maintaining staff expense accountability wherever the night may take them.
What are entertainment expenses?
Entertainment expenses are any costs incurred while providing hospitality to staff, clients, investors or suppliers. They might include:
- Food and drink
- Venue hire
- Sports or event tickets
- Free samples
What entertainment expenses are deductible?
HMRC classify entertainment expenses into two broad categories: business entertaining and staff entertaining. As a broad rule, expenses from staff entertaining are VAT deductible, but business entertainment expenses aren’t.
So if you throw a party in a bar for your employees to celebrate a successful quarter, then the bill should be eligible for a VAT claim. But if you take a group of shareholders and customers out to a football match, then it won’t be.
Can I claim for entertaining clients?
No, entertaining clients comes under the umbrella of business entertainment and as such isn’t eligible for any relief. If you throw an event for staff and clients, then the expenditure on staff is deductible – but not on clients.
That can make for a tricky task for your accountant. Prepaid card solutions such as Soldo make it much easier, by enabling you to set rules to automatically separate VAT-exempt spending.
How does claiming business expenses work?
It depends on your employee expense policy. You might, for example, ask staff to pay out of their own pocket, hold on to their receipts and fill out an expense form – but this is a frustrating process that can place an unnecessary financial burden on your employees.
With Soldo, your team won’t need to claim expenses. Instead, you give them an individual prepaid spending account they can use for their day-to-day business spending.
Can you claim alcohol on business expenses?
Yes, you can claim VAT relief on alcohol – but only as part of staff entertainment such as work parties. Any drinks bills from entertaining customers or anyone not on your payroll (including subcontractors) can’t be claimed.
Choose a complete business spending solution
Get started with Soldo to make entertainment expenses simple – for you and your team.