Business meals and tax-deductible meals & expensed meals for work

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Introduction 

From day to day, we all must eat to survive as human beings. However, when you’re UK contracting or at work during the week, at what point do you receive a business meal or business lunch tax deduction? Furthermore, when can I claim for business meals and on what occasions are business meals tax-deductible? All allowable business expenses for contractors should be wholly, exclusively and necessarily incurred for business purposes. Therefore, if there are times when contractor meals and business lunches are genuine contractor deductions, in which cases do you receive a business meals tax deduction as part of expensed meals for work? In this guide, we’ll look at claiming food as a business expense and when expensing business meals is allowable. Also, we’ll research in which instances one can claim limited company food expenses while working and when they will incur tax-deductible meals.

UK contractors and small business owners will often ask the question, when is lunch a business expense? When eating out on business, they’ll ask, what costs can independent contractors deduct? What’s more, a further thought is when are business meeting meals tax-deductible? If we ask when contractors can claim travel expenses, they can do this for genuine business trips. Indeed, the same applies If you receive a tax deduction for work-related meals.

In this guide, we’ll research what situations you can claim lunch expenses (HMRC guidelines) and contractor dinners for and where you can receive an independent contractor meal deduction. Business expense deductions only apply in specific scenarios when contracting and incurring meals. Therefore, in this guide, we’ll look at claiming food expenses (limited company) and in which instances company meals are tax-deductible.

Initial thoughts 

First thoughts

When we consider tax-deductible meals and when lunch is tax-deductible, let’s look at a limited company contractor or small business owner eating alone. Under this scenario, considering tax deductions for meals, it won’t include meals with colleagues as this is an entirely separate issue. Therefore, we’ll not delve into meals you consume as part of entertainment costs. Indeed, this includes certain business meeting meals with clients or suppliers. We cover meal and entertainment expenses and other entertaining activities elsewhere on this contractor’s website.

Generally, if we research when business lunches are tax-deductible (UK) or when meals are tax-deductible, we must consider if you incur these for business purposes. Therefore, any meals should be wholly and exclusively for your trade or activity. As a result, we investigate deductible meals for contractors; any such expensed meals for work reasons while contracting must pass the test wholly and exclusively for the business. Generally, this rule applies to UK contractors’ allowable expenses across all costs.

Common questions

Many UK contractors or independent workers will likely question when they can claim business meals. These include expensing meals when working away overnight or visiting a client or work site. Therefore, such questions will likely include:

  • Are meals a business expense?
  • What counts as a business meal?
  • Are work lunches tax-deductible?
  • Are business meeting meals tax-deductible?
  • Can I claim food as a business expense?
  • Are food expenses tax-deductible?
  • Can I claim food expenses without receipts?
  • Can I deduct my lunch as a business expense?
  • Is lunch at work tax-deductible?
  • Can you claim for lunch if self-employed?
  • Is a business dinner tax-deductible?
  • Is food and drink tax-deductible?
  • When can you claim food as a business expense?
  • What qualifies as a business meal expense?
  • What food expenses are tax-deductible?
  • Are staff lunches tax-deductible?
  • Can I claim meal expenses on my taxes?

In this guide, we’ll examine these questions in more detail and find out when you receive a lunch or business dinner tax deduction through your company.

How can you claim business meals?

As a contractor, when can you claim lunch as a business expense? As part of this, let’s research when I can receive a business meal tax deduction and, if I can, what the process is. To summarise, the process for claiming allowable business meals is as follows:

  • A limited company owner will claim these through company expenses to reduce the business’s overall tax bill.
  • A sole trader or self-employed person will claim the meals through their tax return to reduce their tax bill.
  • Staff members can make claims based on their employer’s expense policy. Regarding whether a staff lunch is tax-deductible, the employee can claim these if the meals are genuine expenses per HMRC rules. If the employer doesn’t reimburse the total value, the employee can claim this through their tax return if they register for Self Assessment.

HMRC has detailed guidance on what and when you can claim for work meals. This essential HMRC guide covers what you can claim, whereas NIM06250 explains when to make a claim. Moreover, HMRC’s technical guidance page provides more detail on what you can claim.

Business meals -daily work meals 

If you’re a UK contractor or consultant and travel to the same work site each day, you may wonder when lunch expenses are tax-deductible and whether you’ll receive a tax deduction for meals at work. Indeed, any potential tax-deductible food expenses will include meals, beverages, and refreshments. The answer is that as they’re part of your daily work routine, your meals are generally not an allowable expense.

When are meals tax-deductible? 

Preliminary thoughts 

When can I claim my lunch as a business expense (UK)? What’s more, when can you claim meals as a business expense, and what are the conditions as part of this? This guide will look at this in detail and determine the rules. We’ll investigate when you can claim these and what you should think about when you make a claim.

When we research whether business meals are tax-deductible, there are two areas where you can claim for work-related business meal expenses. Therefore, you’ll incur tax-deductible meals if these meals are exclusively for business purposes. If your meals are business costs under the tax rules, you should keep a record of these. Moreover, you’ll receive a 100% business meals tax deduction when you make a claim.

Two examples of what meals are tax-deductible for business purposes? 

As mentioned, there are two main areas to consider when researching when I can claim meals as a business expense. Both are when work-related contractor lunches and meal expenses are tax-deductible for your business.

Locations that aren’t part of your `usual’ work routine 

Are business meals tax-deductible if you work at a remote site or one that isn’t part of your `usual work routine’? Indeed, they save tax, and you can claim the actual meal costs or a meal allowance if you’re on legitimate business. In turn, the meal costs are genuine tax-deductible meals.

Stay away from home overnight 

When you work away from home overnight, you’ll incur accommodation expenses, including business meals. In this instance, you can claim expensed meals for work and make a business meals tax deduction for your food costs while away for work reasons. On the other hand, you can claim a meal allowance when you stay away from home overnight for work reasons. This includes when you work abroad on an overseas assignment.

Summary -claim for your business meals / daily business lunches 

When can you claim business meals?

To clarify the above, if you run your own business and consider when meals are tax-deductible, they’ll only be allowable expensed meals for work in the following circumstances:

  • If you travel to sites that you don’t otherwise travel to under your `usual’ work routine or
  • If you stay away from home overnight.

Therefore, you can claim lunch expenses and meals while you work away when your business journey fits the above criteria.

How can you claim business meals?

In brief, if you can claim the cost of your food and drink, these expenses are 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’re self-employed / a sole trader.

If you’re using digital software to keep your records, the business lunch expense category to use is travelling costs or meal costs.

HM Revenue & Customs (HMRC) guidelines 

When can you claim food expenses as self-employed (UK)?

Are meals tax-deductible for self-employed individuals as well as limited company contractors? i.e., is a tradesman tax deduction or a self-employed daily food allowance available? Basically, 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’s a sole trader but also UK contractors who are directors of their own company), you can claim for “reasonable” costs for a business meal. This includes food and drink expenses for self-employed people when they’re travelling on business if:

  • Your business is, by its nature, itinerant. For example, you’re a commercial traveller.
  • You’re making an “occasional business journey outside the normal pattern.” For example, you might be a home-based illustrator who travels to Manchester to meet a new publisher.
  • If you stay overnight on a business trip as part of your work, you can claim the cost of accommodation and meals. You can also claim Personal Incidental Expenses (PIEs) when you stay away from home overnight for work reasons. When you claim these costs, they’re subject to the 24-month rule. This rule states that you mustn’t be contracted 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 claim the cost of their meals even though they don’t claim the cost of accommodation.

Therefore, when considering expensing food for business, please consider the above guidelines.

Business meals “reasonable” costs -what are these? 

In the case of what and when food is tax-deductible (UK) for the self-employed, HMRC doesn’t define a “reasonable” expense. When looking at work-related business meals for employees, they give an example of “having an elaborate menu and fine wines” as “meals on an unreasonable scale.” Therefore, you’re 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 daily claim rates for meal expenses (HMRC). These are effectively a contractor subsistence allowance when you’re working away from home and away from your regular place of work. Moreover, the tax office will update the amounts that can be claimed as meal/subsistence allowances annually. As of 2024, the official HMRC meal allowances are:

Minimum journey time Maximum amount of meal allowance
5 hours £5
10 hours £10
15 hours (and ongoing at 8 pm) £25

HMRC has a detailed guide covering the above and other travel and subsistence areas for contractors.

Final thoughts 

In this guide, we’ve summarised when your contractor expenses are tax-deductible regarding business meals and where you receive a food tax deduction. Therefore, to determine when business meals are tax-deductible, we outline the two areas where expensed meals for work are allowable and tax-deductible. 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 the receipts for any business meals in a safe place for the future. This is because they prove if the taxman ever asks to see these later.

Depending on your work, you can claim your business clothing. However, there are specific rules concerning what you can claim.

Finally, please remember, when you consider you can claim food as business expenses, you’ll receive a business meals tax deduction, which will help reduce your tax bill 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

LinkedIn    https://www.linkedin.com/groups/4660081/

Published On: April 6th, 2024 / Categories: Expenses, First timer guide /

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