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 are they allowed as a genuine business expense upon which I will receive tax relief? Let us consider in which instances can one claim limited company food expenses while working, and when are business meals tax-deductible.
When we consider tax-deductible meals, let us look at a limited company contractor or small business owner eating alone. Under this scenario considering tax deductions for meals, 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. This includes business meeting meals 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 (UK) 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 expensed meals for work reasons must pass the test wholly and exclusively for the business.
How to claim business meals
Let us consider whether can you claim lunch as a business expense (UK). As part of this, 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.
Business meals -daily work meals
If you are a UK contractor or consultant and travel to the same work site each day, you may wonder when are lunch expenses tax-deductible and whether you will receive a tax deduction for meals at work. 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 can I claim my lunch as a business expense (UK)? In addition, when can you claim meals as a business expense and what are the conditions?
When we investigate are business meals tax-deductible, there are two areas where you can claim for work-related business meal expenses. 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% business meals tax deduction.
Examples of what meals are tax-deductible for business purposes
When we look at when can I claim meals as a business expense, as mentioned there are two main areas to consider. Both are when work-related lunches and meal expenses are tax-deductible for your business.
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’, are business meals tax-deductible? Indeed, they are and you can claim the actual meal costs or a meal allowance if you are on legitimate business. In turn, the meal costs will be genuine tax-deductible meals.
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 a business meals tax deduction and put through expensed meals for work for your food costs while away for work reasons. Alternatively, you could claim 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.
Conclusion -claiming for your business meals / daily business lunches
When you can claim meals
To clarify the above, if you run your own business and we consider are meals tax-deductible, they will only be allowable expensed meals for work 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.
How you can claim meals
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 business lunch expenses and meal costs as part of your business travel expenses:
- Within your company expenses, if you run your own contractor limited company.
- On your tax return, if you are self-employed / a sole trader.
HM Revenue & Customs (HMRC) guidelines -claiming food expenses -self-employed (UK)
Are meals tax-deductible for self-employed individuals as well as limited company contractors? i.e., is there a tradesmen tax deduction or a self-employed daily food allowance available? Notably, under HMRC’s guidelines and business meals tax deduction rules, as a self-employed person (by this we would take it to include someone who is a sole trader but also UK contractors who are directors of their own company), you can claim for “reasonable” costs. This will include food and drink expenses for self-employed people 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. This 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.
Business meals “reasonable” costs -what are these?
In the case of what and when is food tax-deductible (UK) 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 otherwise you may not receive a business meals tax deduction.
HMRC standard meal allowances
The HMRC standard meal allowances (working away from home) are fixed dally claim rates for meal expenses (HMRC). The tax office 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 8pm.
When we consider when are business meals tax-deductible, we have outlined the two areas above when expensed meals for work will be treated as tax-deductible meals. As with all business expenses, you should obtain receipts if you claim expenses for business meal costs. This includes when you incur tax-deductible meals as part of your work. What’s more, you should keep these in a safe place for the future. This is because 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 can you claim food as business expenses, 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.
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