If you run a small business, you may spend money on meals, business lunches, client meetings, staff events or hospitality and wonder whether you can put the cost through the business.
The answer is not simply yes or no.
Some meals can be allowable business expenses, particularly where they arise from qualifying business travel. Ordinary meals you would have bought anyway are generally not deductible for a sole trader. Client entertainment is normally disallowed, even when the meeting has a genuine business purpose. Staff entertaining is treated differently and can be allowable when the relevant conditions are met.
This guide explains the difference and gives practical examples of when meals and entertainment expenses can and cannot normally be claimed.
If you are looking at business expenses more generally, see our guide to What Expenses Can Small Businesses Claim? A Complete UK Guide for a wider overview of allowable expenses.
Quick answer: can a small business claim meals and entertainment?
| Expense | Usually allowable? | Why? |
| Your normal lunch while working | No | Usually an ordinary personal living cost |
| Coffee bought while working at your usual workplace | No | Working does not turn a normal meal into a business expense |
| Meal during qualifying business travel | Potentially | May qualify as business subsistence |
| Meal during an overnight business trip | Potentially | HMRC specifically recognises meals on qualifying overnight business trips |
| Lunch with a prospective client | Generally no | Client entertaining is normally disallowed |
| Taking an existing client to a restaurant | Generally no | Business purpose does not make client entertainment deductible |
| Staff Christmas party | Potentially | Staff entertaining is subject to specific rules |
| Meal provided to employees as part of their work | Potentially | Employee welfare and staff-related expenses can be treated differently |
| Meal with a subcontractor | Depends | The nature and purpose of the expense matter |
| Entertainment where you also attend | Generally no for client entertainment | Your own attendance does not make client entertaining allowable |
The important point is that “business-related” does not automatically mean “tax deductible.”
HMRC’s rules specifically distinguish ordinary living costs, travel and subsistence, and business entertainment.
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Discover how Adroit Accountax can support your business with reliable, professional accounting services.1. Why are business meals so complicated?
The starting point for a sole trader is relatively straightforward.
You normally cannot deduct the cost of food simply because you are working.
Everyone needs to eat, so HMRC generally treats ordinary food and drink as a normal living expense rather than a cost incurred wholly and exclusively for the purposes of the trade.
For example, suppose you run a graphic design business from home.
You work from 9am to 6pm and buy a £12 lunch from a local café.
Although you were working when you bought the lunch, the £12 would normally be a personal expense.
You would have needed to eat whether or not you were running your business.
HMRC’s guidance specifically explains that food and drink are generally normal costs of living and therefore not normally allowable simply because the trader is working.
But there is an important exception.
When you incur additional subsistence costs because you are travelling for a qualifying business purpose, the position can be different.
That distinction is one of the most important things to understand when claiming meals.
2. Can a sole trader claim meals while travelling for business?
Potentially, yes.
HMRC allows certain travel and subsistence costs where the underlying journey qualifies as business travel.
For example, imagine you normally work from your office in London but need to travel to Birmingham for a genuine business meeting with a client.
You pay:
- £80 for the train
- £14 for lunch
- £6 for a coffee
- £12 for an evening meal because the business trip requires you to stay overnight
- £110 for a hotel
The train and hotel can potentially qualify as business travel expenses, and qualifying meals incurred during the business journey may also be allowable.
The important point is that the meal is being incurred because of the qualifying business journey, rather than simply because you were working that day.
HMRC’s self-employed guidance lists hotel rooms and meals on overnight business trips among potentially allowable travel costs.
Example: genuine business travel
Sarah normally works from her London office.
She has to travel to Manchester for a two-day client project. The journey is a genuine business trip and she stays overnight.
Her expenses are:
| Cost | Amount | Treatment |
| Train | £95 | Potentially allowable |
| Lunch while travelling | £15 | Potentially allowable, depending on circumstances |
| Dinner while away overnight | £25 | Potentially allowable |
| Hotel | £130 | Potentially allowable |
| Breakfast while staying overnight | £12 | Potentially allowable |
| Personal shopping | £40 | Not allowable |
The fact that Sarah was eating during the trip does not automatically make every food purchase deductible. The circumstances of the journey and the nature of the expense still matter.
3. What is subsistence?
You will often see the word “subsistence” used when discussing business travel.
In simple terms, it refers to the costs of basic needs incurred while travelling for business, such as food and sometimes accommodation.
It is important not to interpret “subsistence” as meaning:
“Anything I eat while working is a business expense.”
That is not the rule.
For a self-employed person, ordinary food is generally a personal living cost. The business connection usually comes from the qualifying travel circumstances.
This is why the same £15 meal can have completely different tax treatment depending on the circumstances.
Example
Scenario A: Normal working day
You work at your usual office and buy a £15 lunch.
Usually: not allowable.
Scenario B: Qualifying business journey
You travel to another location for a genuine temporary business engagement and incur a £15 meal as part of the journey.
Potentially: allowable.
The difference is not the price of the meal or the fact that you discussed business while eating. It is the reason the expense was incurred.
4. Can you claim a meal with a client?
This is where many small business owners make mistakes.
Suppose you take a client to a restaurant and spend £90 on lunch.
You discuss:
- A new project
- Pricing
- Future work
- The client’s requirements
- Your business relationship
It may feel like an obvious business expense.
However, for tax purposes, client entertainment is generally not an allowable deduction against trading profits.
HMRC specifically states that self-employed people cannot claim the cost of entertaining clients, suppliers and customers.
So:
“We discussed business” does not automatically make a restaurant bill tax deductible.
Example
You are a consultant and meet an existing client for lunch.
The bill is £75.
You pay the whole bill and keep the receipt.
Even though the meeting was entirely about business, the £75 would generally be treated as business entertaining and disallowed for tax purposes.
The same principle can apply to:
- client lunches
- client dinners
- drinks with customers
- hospitality at sporting events
- entertaining prospective customers
- hospitality provided at events
- meals provided as part of client entertainment
HMRC’s business entertainment guidance takes a broad approach to entertainment and hospitality.
5. What about your own meal when entertaining a client?
This is another area where businesses sometimes get confused.
Imagine you take a prospective client to a restaurant.
The total bill is:
- Client’s meal: £60
- Your meal: £35
- Drinks: £25
- Total: £120
You cannot generally make the £35 for your own meal allowable simply by separating it from the client’s meal.
If your meal forms part of the client entertainment, it can be caught by the same entertainment restriction.
HMRC guidance explains that expenditure incidental to business entertainment can also be disallowed.
So you should not assume that:
“The client’s food is entertainment, but my food is a business meal.”
The context matters.
6. What about taking a prospective customer out for lunch?
The answer is generally the same.
It does not matter whether the person is:
- an existing customer
- a potential customer
- a supplier
- another business contact
If the purpose is hospitality or entertainment, the expense will generally be treated as business entertainment and is not deductible against trading profits.
For example:
A web designer takes a potential £10,000 client to an expensive restaurant to discuss a proposed website project.
The meeting has a clear commercial purpose.
But the restaurant bill is still generally business entertainment.
This is an important distinction:
A genuine business purpose does not automatically make entertainment tax deductible.
7. Can a business claim staff meals and staff entertaining?
This is different from client entertaining.
HMRC has a specific exception for employee entertaining.
Staff entertaining can be allowable where it is genuinely for employees and meets the relevant business expense conditions.
For example, a company might organise:
- a staff Christmas party
- an employee-only meal
- a staff social event
- an employee sporting event
HMRC states that staff entertaining is allowable where it is wholly and exclusively for the purposes of the trade and is not merely incidental to entertainment provided to customers or other non-employees.
Example
A limited company has eight employees.
The company pays £800 for an employee-only Christmas dinner.
There are no clients or customers attending.
This is fundamentally different from taking eight clients to dinner.
The staff event may qualify as an allowable business expense, subject to the relevant rules.
However, “staff entertaining is allowable” does not mean every meal involving an employee is automatically deductible.
The circumstances still need to be considered.
8. What if clients and employees attend the same event?
This is where the distinction becomes more important.
Suppose a company organises a dinner attended by:
- 10 employees
- 20 clients
The company pays for everyone’s food and drinks.
You cannot simply classify the whole event as “staff entertaining” because employees attended.
HMRC specifically considers whether the staff entertainment is incidental to entertainment provided to customers or other non-employees. One practical question is whether the employer would have paid for the event if the external guests had not been present.
If the event was essentially a client entertainment event, the presence of employees does not necessarily turn their portion into allowable staff entertaining.
This is why mixed events should be recorded carefully.
9. Can a sole trader claim a meal with a subcontractor?
This needs more care than simply saying “subcontractor meals are allowable” or “subcontractor meals are not allowable.”
The tax treatment depends on what the payment actually represents.
For example, suppose a construction business has a subcontractor working on a project.
The business owner takes the subcontractor to a restaurant purely as hospitality.
That may be treated as entertainment.
But suppose workers are travelling together as part of a qualifying business journey and food is incurred as part of that journey.
The analysis may be different.
HMRC’s guidance recognises circumstances where ordinary subsistence for people directly involved in the trader’s business can be allowable, but there needs to be a genuine connection with the services being provided and the circumstances must be considered.
The safest approach is therefore to look at the actual purpose and circumstances of the payment, rather than who was sitting at the table.
10. Can you claim coffee while working?
Usually, no.
This is one of the easiest expenses to overclaim.
Suppose you work from a café for three hours and buy:
- coffee: £4
- sandwich: £8
You might think:
“I was working, so this is a business expense.”
But working while consuming food does not normally make the food and drink deductible.
If you were working at your normal place of business and simply bought lunch or coffee during the working day, it is generally an ordinary living cost.
The same principle applies if you work from home and order lunch because you are too busy to cook.
Being busy does not change the underlying nature of the expense.
However, not every journey made for work is automatically a business journey.
The tax treatment depends on why you are travelling, where you are travelling to, how your vehicle is used and whether the journey is genuinely undertaken for the purposes of the business.
For example, travelling from home to a permanent workplace is generally treated differently from travelling to visit a client or another qualifying business location.
This guide explains the main UK rules around business mileage and travel expenses, including simplified mileage rates, public transport, parking, accommodation, commuting and the records you should keep.
The rules can differ depending on whether you are a sole trader, business partner, employee or limited company director, so it is important to apply the rules relevant to your circumstances.
11. What if you work from a café because you don’t have an office?
This can still be problematic.
Suppose you are a freelance designer who works primarily from home.
You decide to spend every Friday working from a café.
You buy a £5 coffee and £10 lunch each Friday.
Even though you are using the café as your working environment, you should not automatically treat the food and drink as allowable business expenses.
The fact that you chose a different place to work does not necessarily create a qualifying business journey.
This is different from travelling to a temporary workplace or another business location for a genuine business purpose.
12. What about meals during an overnight business trip?
This is one of the clearer situations.
HMRC’s self-employed guidance specifically identifies meals on overnight business trips as a potentially allowable travel expense.
For example, you travel from London to Leeds for a two-day business assignment and need to stay overnight.
You incur:
- train: £90
- hotel: £120
- dinner: £25
- breakfast: £12
- lunch: £15
The travel, accommodation and qualifying subsistence expenses can potentially be claimed, assuming the underlying journey qualifies as business travel.
You should keep the relevant receipts and records and make sure the journey itself has a genuine business purpose.
13. What about business travel that does not require an overnight stay?
An overnight stay is not the only circumstance in which business travel can matter.
A genuine qualifying business journey can involve travel to another location without staying overnight.
For example, you might travel from your normal business base to:
- a client’s premises
- a temporary work location
- a business event
- a conference
- another branch
- a supplier’s premises
The treatment of food and drink still depends on the circumstances.
The key question is not:
“Did I sleep away from home?”
It is:
“Was this expense incurred because of a qualifying business journey rather than being an ordinary personal living cost?”
That is a much better way to assess the expense.
14. What about breakfast before travelling?
This is an area where people can easily overgeneralise.
Suppose you normally leave home at 7:30am and buy breakfast on the way to your usual workplace.
That is normally a personal expense.
Now consider a different situation where you have to make a genuine business journey that starts unusually early and you incur additional subsistence costs as a result.
The circumstances may support different treatment.
This is why you should not use a blanket rule such as:
“Breakfast before 8am is allowable.”
There is no useful tax rule based simply on the time of day.
The reason for the journey and the reason for the expenditure are what matter.
15. Can you claim drinks with a business meeting?
Again, the answer depends on what the meeting actually involves.
Coffee with a client
If you buy a coffee for yourself and a client during a business meeting, this can fall within the rules for business entertainment.
The fact that it is only coffee rather than a three-course meal does not automatically change the nature of the expense.
Coffee while travelling for business
If you are travelling for a qualifying business purpose and incur reasonable subsistence costs during that journey, the treatment may be different.
The distinction is therefore:
Business travel subsistence ≠ client entertainment.
They should not be treated as the same category simply because both involve food or drink.
16. What about conferences and business events?
Conferences can involve several different types of expenditure.
For example, you may pay for:
- conference tickets
- train travel
- hotel accommodation
- meals
- drinks
- networking events
- client hospitality
These should not necessarily all be treated in the same way.
A conference ticket that is relevant to your business may be an allowable business expense.
Your train journey to the conference may also qualify as business travel.
Hotel accommodation may qualify where the travel itself is allowable.
But if you attend a separate client entertainment event during the conference, that may be subject to the business entertainment rules.
The fact that everything happened during the same business trip does not mean every expense automatically has the same tax treatment.
17. Business meal vs client entertainment: a practical comparison
This is one of the most useful distinctions to remember.
| Situation | Likely treatment |
| Lunch at your normal workplace | Personal |
| Coffee while working from home | Personal |
| Lunch at your usual office | Personal |
| Meal caused by qualifying business travel | Potentially allowable |
| Dinner during qualifying overnight business travel | Potentially allowable |
| Hotel during qualifying business travel | Potentially allowable |
| Lunch with a client | Generally disallowed entertainment |
| Dinner with a prospective client | Generally disallowed entertainment |
| Drinks with a supplier for hospitality | Generally disallowed entertainment |
| Employee-only Christmas party | Potentially allowable |
| Staff meal provided as part of employment | Potentially allowable depending on circumstances |
| Employee attending client entertainment | May be treated as incidental to client entertainment |
This is why simply creating a bookkeeping category called “Business Meals” is not enough.
The underlying reason for each transaction matters.
18. Does it matter whether you are a sole trader or a limited company?
Yes.
The broad distinction between business travel/subsistence and business entertainment is important for both, but the way the expense is accounted for can differ depending on whether you are self-employed or operating through a limited company.
For a sole trader, allowable expenses are deducted when calculating taxable trading profits.
For a limited company, the company considers whether expenditure is deductible when calculating its taxable profits, while separate employee benefit and reporting rules can also become relevant.
For example, if a company pays for employee entertainment, there may be tax and reporting considerations for the employees as well as corporation tax treatment for the company.
That is why a limited company should not simply copy the expense rules used by a sole trader.
For a broader comparison, see our separate guide to Sole Trader vs Limited Company Expenses: What Can You Claim?
19. Business entertainment is not the same as an allowable marketing expense
Another common mistake is trying to turn entertainment into advertising.
For example:
“I took a potential customer to an expensive restaurant, so this is marketing.”
The label does not determine the tax treatment.
If the expenditure is actually hospitality or entertainment provided to a customer or potential customer, it can still be caught by the business entertainment rules.
HMRC specifically states that business entertainment is not an allowable deduction, even where the expenditure is genuinely connected with the business.
A genuine advertising campaign is a different matter.
For example:
- Google Ads
- website advertising
- printed advertising
- business directories
- promotional materials
can be considered under the normal rules for business advertising and marketing.
You cannot turn client hospitality into advertising simply by recording it under the marketing category.
20. What records should you keep for business meals?
Good records are particularly important where an expense could be questioned.
For potentially allowable travel and subsistence expenses, keep:
- the receipt or invoice
- date of the expense
- amount
- location
- reason for the journey
- business purpose
- who the expense related to, where relevant
- details of the business journey
- evidence of the journey where appropriate
For example, don’t simply record:
“Dinner = £32”
A better internal record might say:
“Dinner during overnight business trip to Manchester for client project – 14 September 2026.”
That gives your accountant much more useful information.
For entertainment, it is also sensible to record who was entertained and the business context, even though the expense itself may ultimately be disallowed for tax purposes.
HMRC guidance emphasises the importance of records when considering entertainment expenses.
21. Should you still record client entertainment if it is not tax deductible?
Yes.
This is an important bookkeeping point.
“Not tax deductible” does not necessarily mean:
“Don’t put it in the accounts.”
The expense can still be a genuine business transaction and may need to be recorded correctly so that it can be identified and treated appropriately in the tax computation.
For example, a limited company may pay £200 for client hospitality.
You should not simply pretend the transaction never happened.
Instead, it should be recorded in the appropriate accounting category and then treated correctly when calculating taxable profits.
This is one reason why accurate bookkeeping matters.
22. What about VAT on business entertainment?
VAT is a separate question from whether an expense is deductible for income tax or corporation tax.
This distinction is important.
An expense can be:
- allowable for tax but have different VAT treatment, or
- disallowed for tax but have particular VAT rules.
For example, business entertainment of clients and customers generally has restrictions on VAT recovery, while employee entertainment can have different treatment depending on the circumstances.
So you should not assume:
“If the business paid VAT on it, we can reclaim the VAT.”
VAT recovery should be considered separately from the treatment of the expense for direct tax.
If your business is VAT registered, your accountant should review the VAT position as well as the income tax or corporation tax position.
23. What about staff Christmas parties?
Staff Christmas parties are a common source of confusion because there are two separate questions:
- Is the cost deductible for the business?
- Is there a taxable benefit for the employees?
The fact that a business can potentially deduct the cost does not automatically mean employees have no tax implications.
For example, employee-only entertaining can be allowable for the business, but separate rules can determine whether the employees receive a taxable benefit.
This is particularly relevant to annual functions and the commonly discussed £150 per head threshold.
The £150 figure should not be misunderstood as a general £150 tax deduction for any staff meal or entertainment.
It relates to specific rules for annual functions and qualifying events and has conditions attached.
Businesses should therefore assess the event against the actual benefit rules rather than assuming:
“It’s under £150, so everything is tax free.”
24. What if the business owner is the only employee?
This is where advice can become particularly important.
A business owner running a limited company may be a director and employee of the company.
The treatment of staff entertaining and annual functions can therefore be different from the position of a sole trader entertaining themselves.
Do not automatically assume that a company can pay for any personal meal simply because the owner is technically an employee.
The event still needs to fall within the relevant rules.
If you are a director of your own limited company and are considering paying for an annual event, staff dinner or similar expense through the company, it is worth checking the specific conditions before assuming it is tax free.
25. Common mistakes with meals and entertainment
Mistake 1: Claiming every meal eaten while working
Working does not automatically make food an allowable expense.
Mistake 2: Calling client entertainment “marketing”
The accounting label does not change the nature of the expense.
Mistake 3: Claiming only the client’s meal
If your own meal forms part of the entertainment, separating it on the receipt does not necessarily make it deductible.
Mistake 4: Assuming every meal while travelling is allowable
The journey must itself qualify and the expense must be considered in that context.
Mistake 5: Treating coffee meetings as automatically allowable
A coffee meeting with a client can still be entertainment.
Mistake 6: Assuming “business purpose” means “allowable”
Many expenses have a genuine business purpose but are specifically restricted by tax rules.
Mistake 7: Mixing staff and client entertainment
An event involving employees and customers may require a more careful analysis.
Mistake 8: Ignoring VAT
VAT recovery and income tax/corporation tax deductibility are separate questions.
Mistake 9: Keeping poor records
A receipt alone may not explain why the expense was incurred.
26. A simple test before claiming a meal
Before putting a meal through the business, ask these questions:
Question 1: Why was the meal incurred?
Was it:
- an ordinary meal?
- business travel subsistence?
- client entertainment?
- staff entertaining?
- part of a conference or business event?
Question 2: Where were you?
Were you:
- at your normal workplace?
- working from home?
- travelling to a temporary business location?
- staying overnight for business?
- attending an event?
Question 3: Who was the meal for?
Was it:
- just you?
- employees?
- clients?
- potential customers?
- suppliers?
- subcontractors?
Question 4: Would you have incurred the expense anyway?
This can be a useful practical test.
If you would have bought the same lunch regardless of whether you were running the business, that points towards an ordinary living cost.
If the additional cost arose because you had to undertake a qualifying business journey, the analysis may be different.
Question 5: Is there a specific tax restriction?
Even if the expense is genuinely connected with the business, check whether it falls within a category that is specifically disallowed, such as client entertainment.
27. Worked examples
Example 1: Lunch at your usual workplace
A sole trader works from their normal office and buys a £13 lunch.
Tax treatment: Generally not allowable.
The meal is an ordinary personal living cost.
Example 2: Client lunch
A consultant takes a client to lunch and pays £85.
The meeting is entirely about a new contract.
Tax treatment: Generally disallowed as business entertainment.
The genuine business purpose does not override the entertainment restriction.
Example 3: Overnight business trip
A sole trader travels from London to Birmingham for a two-day business engagement.
They pay:
- Train: £90
- Hotel: £125
- Dinner: £25
- Breakfast: £12
Tax treatment: These expenses can potentially qualify where the underlying journey is an allowable business journey and the costs meet the relevant rules.
Example 4: Working from a café
A freelancer works from a café for the afternoon.
They spend:
- Coffee: £4
- Lunch: £11
Tax treatment: Generally personal.
The fact that the freelancer was working while consuming the food does not automatically make the costs allowable.
Example 5: Employee Christmas event
A company holds an employee-only Christmas dinner.
The company pays £1,200 for the event.
Tax treatment: Staff entertaining can be allowable subject to the relevant conditions, with separate consideration of employee benefit rules.
Example 6: Client event with employees
A company holds a dinner attended by employees and several major clients.
Tax treatment: Do not automatically treat the entire cost as staff entertaining. The nature and primary purpose of the event need to be considered, particularly where employee participation is incidental to entertaining customers.
28. Meals vs entertainment: the rule to remember
If you remember only one thing from this article, remember this:
A meal is not automatically an allowable business expense simply because business is discussed over it.
Instead, identify what the expense actually represents.
Ordinary food: generally personal.
Food arising from qualifying business travel: potentially allowable.
Client hospitality: generally disallowed.
Employee entertaining: potentially allowable subject to the relevant conditions.
That distinction is much more useful than simply memorising a list of “allowed” and “disallowed” meals.
29. How this fits into your wider business expenses
Meals and entertainment are only one part of the expenses a small business may incur.
Other potentially relevant categories include:
- office costs
- software
- business phone and internet
- professional fees
- advertising
- insurance
- business travel
- mileage
- working from home
- equipment
- stock
- staff costs
- training
- banking and financial costs
Our main guide, What Expenses Can Small Businesses Claim? A Complete UK Guide, covers these categories in more detail and explains the general rules for deciding whether a cost is an allowable business expense.
For a deeper look at vehicle journeys, see our guide to Business Mileage and Travel Expenses.
And if you work from home, see our dedicated guide to Working From Home Expenses for the Self-Employed.
Frequently Asked Questions
Can a sole trader claim lunch as a business expense?
Usually not if it is an ordinary meal at your normal place of work. Food is generally treated as a normal living cost. However, meals incurred in qualifying business travel circumstances can potentially be allowable.
Can I claim a meal with a client?
Generally no. Client entertaining is normally disallowed for tax purposes, even when the meeting has a genuine business purpose.
Can I claim meals when travelling for business?
Potentially. Qualifying business travel can allow certain subsistence costs, including meals in appropriate circumstances. HMRC specifically lists meals on overnight business trips as potentially allowable for the self-employed.
Can I claim coffee while working?
Generally not if it is simply your normal coffee or food while working at your usual place of business.
Can a limited company claim staff meals?
Potentially. Staff entertaining is subject to specific rules and can be allowable where the conditions are met. Employee benefit and reporting rules may also need to be considered.
Is a staff Christmas party tax deductible?
It can potentially be allowable for the business, but separate rules determine whether the employees receive a taxable benefit. The annual function rules should be checked rather than treating the £150 figure as a general meal allowance.
Can I claim a meal because I worked late?
Not automatically. Working late by itself does not turn an ordinary meal into an allowable business expense. The circumstances and reason for the expense need to be considered.
Can I claim food while working from a coffee shop?
Generally not simply because you are working there. The food remains an ordinary living cost unless there are circumstances that bring it within the relevant business travel or other rules.
Can I claim a meal with a prospective client?
Generally no if it is client entertainment. A potential customer is still a customer or business contact for these purposes.
Is business entertainment tax deductible?
Generally not. HMRC’s rules specifically restrict deductions for business entertainment and related incidental expenditure.
Should I record client entertainment in my accounts?
Yes. An expense being disallowed for tax does not mean it should be ignored in your accounting records. It should be recorded correctly and dealt with appropriately in the tax computation.
Key Takeaways
The rules around meals and entertainment are easier to understand when you stop asking:
“Was this a business meal?”
and instead ask:
“Why did the business incur this cost?”
For most small businesses:
- Ordinary meals are generally personal expenses.
- Meals connected with qualifying business travel can potentially be allowable.
- Meals on qualifying overnight business trips can potentially be claimed.
- Client and customer entertainment is generally not tax deductible.
- A genuine business discussion does not make client entertainment allowable.
- Staff entertaining can be allowable subject to specific conditions.
- Mixed staff/client events require more careful consideration.
- VAT treatment is separate from income tax or corporation tax treatment.
- Good records should explain the business circumstances behind the expense.
The safest approach is not to claim every meal that feels “business-related”. Instead, identify the type of expense, understand the specific tax rule that applies to it, and keep enough records to support your treatment.
Need help with your business expenses?
If you are unsure whether your meals, travel, mileage, equipment or other costs are allowable, an accountant can review the expenses based on your actual circumstances and make sure they are recorded correctly.
Adroit Accountax helps UK small businesses understand their allowable expenses, keep accurate records and deal with their tax obligations correctly.
If you are based in London and want help reviewing your business expenses, speak to our Small Business Accountants in London.
