So, can you claim for that cup of coffee at a networking meeting or not?
When you’re an employee, your day can be quite structured, and you may have found that your food and drink expenses would have been restricted to what you decide to have for lunch.
As a business owner, food and drink becomes far less clear cut.
You may be travelling to see clients. Having meetings in cafes. Grabbing a sandwich whilst you’re out on the road.
It can be tempting to think that every food and drink purchase is a business expenses but I’m afraid that is not the case.
To help you to understand what you can and cannot claim for, I will run through a handful of questions, so you can see how your answers will impact what you can put through the accounts.
Does your business rely on travel?
There is a difference between you doing a lot of travel within your business and your business relying upon that travel.
The argument towards relying would be if your business involved you travelling around the country. This could be to put on workshops, give presentations and talks, or touring if you are a musician or actor for example.
All these would mean that getting in the car or on the train is an integral part of your business and something that it couldn’t survive without. And as a result, the food and drink that you buy during the day would be allowable.
This doesn’t include driving between two business premises or a long drive to your office. Although you could argue that your business relies upon you making these journeys, they are considered a commute and so fall under personal mileage.
Is this a one-off trip which falls outside of your normal working pattern?
If you travel to clients as part of your job, then any lunch or drinks that you may buy on the way are not allowable.
You can, however, claim for your food and drink if you are spending the day on a training course or at a conference. This is because it is something that you wouldn’t normally do and therefore, you are purchasing food because you are in this unusual routine.
Does the travel involve you staying overnight?
If you are working on a client project, attending a training course or anything business related that results in you having to stay overnight, then the food and drink that you purchase whilst you do so is allowable.
This could include any instances where a meeting or project overruns and you stay overnight as you are unable to get home.
It doesn’t include any nights that occur because you decide on making a holiday out of the journey, or tagging on visit to see friends and family. The overnight stay must strictly have occurred because of a business activity.
Are you buying a meal to win over a potential client or treat a current one?
If, in the process to win new work, you decide to take a potential client out for a meal. Or if you want to treat a current client as a thank you for their custom or to celebrate the completion of a project. Then these drinks and meals can go through the accounts as a business expense, but you are unable to offset them against your taxable profits.
This means, you cannot get tax relief on these meals.
This is because HMRC consider these to be entertaining. And anything that falls into the entertaining category, such as tickets to sporting events, shows, charity balls and so on are not considered tax deductible expenses.
So, as you can see. The rules around what food and drink you can claim are actually quite tight.
This means that the cup of coffee you grab on the way to a networking event or the tea and cake at the café when you meet a client are not considered to be a business expense.
If you have recently been employed, then this is a good source of reference to what you can put through your business. Simply ask yourself, would your employer have paid for this. The chances are if the answer is yes, then you can claim it. No, and you can’t.