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When can I Claim Food & Drink as a Business Expense?

Thursday, January 18, 2024
KarenRai

Now, here’s a question we get asked A LOT by our self-employed clients… 

Q - When can I claim food and drink as a business expense?  

Let us provide you with the answers – although, sadly it’s not as straight forward as you might have hoped…. 

Let’s start with the biggest caveat around all expenses, not just food and drink. This is that HMRC requires business expenses to be wholly and exclusively for the purpose of your business.  

Some might argue that this means all food and drink expenses are therefore a business expense as you need food and drink to be able to work. Good luck making that case to HMRC! 

We’re afraid that HMRC will only allow food and drink to be claimed as a business expense if the purchase is outside of your normal working routine and made because you find yourself somewhere that would be classed as a temporary place of work. As an example, you can’t claim the meal deal you eat at your desk every day, but you could claim a meal in a hotel of you’re travelling for business.  

It's important to understand HMRC’s terminology here as this can make the difference between a correct or incorrect claim. So, what would HMRC class as a ‘normal working routine’ and a ‘temporary place of work’?  

Let’s use an example to help make this grey area a bit clearer… 

If you are a freelance graphic designer, who as a rule works from home, then food and drink consumed in your home cannot be classed as a business expense. If, however, you travel to meet a client for a meeting in a coffee shop, then food and drink purchased there would be an allowable expense. If you then decided that the coffee you enjoyed during your meeting was the best coffee you’d ever tasted, so you chose to go back there at the weekend for another, this order could not be claimed as an expense.  

This grey area gets a little greyer if you then decide that you loved the vibe of the coffee shop, as well as their oat milk macchiatos with chocolate sprinkles, and therefore choose to plot up there on Monday morning with your laptop for some creative inspiration. Would your Monday morning food and drink expenses be claimable?  

It really does come down to the coffee shop not being your ‘normal place of work’, and therefore you only work there outside of your ‘normal routine’. Your visit must also be wholly and exclusively for the purpose of your work, so arranging to meet a friend for lunch once you’ve finished your work and claiming for your meal is a no go!  

So, now you know when you can claim food and drink as an allowable expense, but do you know ‘which’ food and drink you can claim? Again, we’re back to understanding HMRC’s terminology, but the food and drink you purchase to ‘sustain’ you during your working hours, away from your ‘normal place of work’ and outside of your ‘normal routine’ must be ‘reasonable’. As an example, a bottle of champagne and an eight-course taster menu for lunch would not be classed as ‘reasonable’. This is not needed to sustain you for the purpose of your work.  

Our advice, let Ellacott Morris manage your expenses. Our use of Xero cloud accounting software and the compatible DEXT receipt bank app makes light work of logging your expenses, supported by our expertise that you’re only claiming what you should, and not omitting any missed claims. So, when it’s time to submit your tax return, you can rest assured that everything is as it should be. Take a look at all the services we offer, designed to make your life easier and your expenses less of a grey area – simply visit https://ellacottmorris.co.uk/tax-returns/ or contact us on 01255 425059 or via 
info@ellacottmorris.co.uk 

Ellacott Morris – where everybody counts… 


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