VAT on claims for subsistence
Q: I have a VAT registered Ltd company that claims a flat £12.50 per day for subsistence. Can they just claim 1/6 of whatever amount the Ltd company pays them?
A: No the company cannot claim VAT back for round sum payments / allowances. In order to be able to make a claim for input tax, the payments by the company need to represent specific costs incurred by the employee and (as a general rule) the actual VAT receipts, including a simplified VAT invoice, would be needed as evidence of input tax.