Claiming expenses for the cost of food and drink
We all need to eat to live, but when does food become a business expense that you’re allowed to claim tax relief on?
I’m looking here only at the cost of food when you’re eating alone, not when you’re entertaining business contacts. That’s a separate issue altogether!
In brief, you can claim the cost of your own food and drink when you’re travelling on business.
But tax is never as easy as all that. The rules are different if you’re an employee (including of your own limited company) or if you’re self-employed.
Let’s look at each of them in turn.
A few years ago, self-employed people couldn’t claim the cost of any food or drink incurred while travelling on business, unless they were staying away overnight.
HM Revenue said that “everyone must eat to live” and therefore eating wasn’t an allowable expense if you were self-employed – despite the fact that employees could claim for some business meals!
But they have since closed the gap and allowed the self-employed to claim some food costs.
As a self-employed person, you can claim “reasonable” costs of food and drink when you’re travelling on business, if:
- Your business is by nature itinerant (for example, you’re a commercial traveller), or
- You’re making an “occasional business journey outside the normal pattern”, for example, you’re a home-based illustrator and you travel to London to meet a new publisher, or
- You stay overnight on a business trip and claim the cost of accommodation as well as meals.
HM Revenue have extended this to “traders who do not use hotels”, and say specifically that long-distance lorry drivers who sleep in their cabs can also claim the cost of their meals, even though they’re not claiming the cost of accommodation.
I would read that to say that “traders who do not use hotels”, would also mean that you can claim the cost of your meal if you’re travelling on business and stay overnight with a friend, but you eat out before going to your friend’s house.
“Reasonable” costs? What are those?
In the case of food and drink for the self-employed, HM Revenue don’t give a definition of what a “reasonable” expense is.
When looking at meals for employees they give an example of “having an elaborate menu and fine wines” as “meals on an unreasonable scale”.
So you’d be well advised to keep clear of the Ritz if you want to claim the cost of a business meal!
If you’re an employee, you may have some meals provided by your employer, for example if your workplace has a staff canteen.
What I’ll look at here is the cost of your meals when you’re travelling on business, if you pay for them yourself and then claim that cost back from your employer.
When does that not count as a taxable benefit?
Basically, if you can claim the cost of the travel, you can claim the cost of the meal, because for employees, HM Revenue includes meals under “the necessary cost of business travel”.
So there’s no requirement for the journey to include an overnight stay, or be outside your normal pattern of business travel, when you’re an employee.
The cost of meals is one case where HM Revenue are more generous to employees than to the self-employed – so do be clear as to what your status is!