We all need to eat to survive as human beings. However, when you work, at what point do you receive a business meal or business lunch tax deduction? Furthermore, when can I claim for business meals and when are they allowed as a genuine business expense? Therefore, let us consider in which instances can one claim food while working, and when are business meals tax-deductible.
When we consider tax-deductible meals, let us look at a contractor or small business owner eating alone. Under this scenario, it will not include with colleagues as this is an entirely separate issue.
We will also not delve into meals you consume as part of entertainment costs, such as with clients or suppliers. Please note that this is because meal and entertainment expenses and other entertainment activities are covered elsewhere on this website.
Generally, when we look at when are business lunches tax-deductible or when are meals tax-deductible, we need to consider if you incur these for business purposes, as is the case with all other business expenses. Therefore, the meals and lunches must pass the test wholly and exclusively for the business.
How to claim business meals
Let us consider whether can I claim lunch as a business expense or, when can I receive a business meal tax deduction. If I can do this, what is the process?
- A limited company owner will claim these through their company expenses.
- A sole trader or self-employed person will claim the meals through their personal tax return.
Daily work meals
If you are a contractor or consultant and travel to the same work site each day, you may wonder if your meals are tax deductible. Please note this will include meals, beverages, and refreshments. The answer is that as they are part of your daily work routine, your meals are generally not an allowable expense.
When are meals tax-deductible?
When we investigate are business meals tax-deductible, there are two areas where you can claim expenses for work-related meals. You will incur tax-deductible meals if you can show that these are exclusively for the purposes of the business. When you can do this, you will receive a 100% deduction against tax.
Examples of when work-related meals and lunches are tax-deductible
Locations that are not part of your `usual’ work routine
If you work at a remote site or one that is not part of your `usual work routine’. You can claim a meal allowance or the actual meal costs if you are on legitimate business.
Staying away from home overnight
You will incur accommodation expenses, including meals, when you work away from home overnight. In this instance, you can also claim for your meals for work reasons or a meal allowance when you stay away from home overnight for work reasons. This includes when you work abroad if you have an overseas assignment.
Eligible to claim for your business meals and lunches
To clarify the above, if you run your own business and we consider are meals tax-deductible, they will only be so in the following circumstances:
- If you travel to sites that you do not otherwise travel to under your `usual’ work routine; or
- If you stay away from home overnight.
In brief, if you can claim the cost of your food and drink, these expenses will be a business tax deduction. Therefore, you can include these as part of your business travel expenses:
- Within your company expenses, if you run your own limited company.
- On your tax return, if you are self-employed / a sole trader.
Business meals -HM Revenue & Customs (HMRC) guidelines
As a self-employed person (by this we would take it to include someone who is a sole trader but also contractors who are directors of their own company), you can claim for “reasonable” costs of food and drink when you are travelling on business, if:
- Your business is, by its nature, itinerant. For example, you are a commercial traveller.
- You are making an “occasional business journey outside the normal pattern.” For example, you’re a home-based illustrator and travel to Manchester to meet a new publisher.
- As part of your work, you stay overnight on a business trip and claim the cost of accommodation and meals. Please note that you can also claim Personal Incidental Expenses (PIEs) when you stay away from home overnight for work reasons. When you claim for these costs, they are also subject to the 24-month rule, which means that you must not be contracted to be based at your current worksite for longer than 24 months.
- HMRC has extended this to “traders who do not use hotels.” Specifically, long-distance lorry drivers who sleep in their cabs can also claim the cost of their meals, even though they do not claim the cost of accommodation.
“Reasonable” costs? What are these?
In the case of food and drink for the self-employed, HMRC does not define a “reasonable” expense.
When looking at work-related meals for employees, they give an example of “having an elaborate menu and fine wines” as “meals on an unreasonable scale.”
Therefore, you are well-advised not to claim any meals at lavish establishments that charge an arm and a leg.
HMRC standard meal allowances
HMRC will update the amounts that can be claimed as meal/subsistence allowances yearly. The last update was on 7 April 2019, and the official HMRC meal allowances since this date are:
- £5 for travel of 5 hours or more.
- £10 for travel of 10 hours or more.
- £25 for travel of 15 hours or more, or if the travel is ongoing after 8 pm.
As with all business expenses, you should obtain receipts if you incur allowable business meal costs. What’s more, you should keep these in a safe place as they are proof if the taxman ever asks to see these at a later date.
Depending upon the type of work that you do, you may also be able to claim your business clothing. However, there are specific rules to bear in mind concerning what you can claim.
Finally, please remember, when you consider if you can claim for your meals or lunches, you will receive a business meals tax deduction when:
- You travel to a site outside your `regular work pattern’; or
- You stay away from home overnight for business reasons.
Link to Contractor Advice UK group on