This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Employment Income Manual

Value Added Tax: inter-relation with earnings and expenses: VAT and

Where the cost to an employer of providing a benefit for a director etc is reduced by a contribution from the director concerned (see EIM21120) the employer may be chargeable to VAT in respect of that contribution.

Any VAT so chargeable will represent expenditure incurred by the employer in connection with the provision of the benefit, and is included in calculating the amount of the taxable benefit.