TJ Smith
Claiming food and drink as a business expense can be a confusing topic for many UK business owners. While there are instances where such costs are deductible, HMRC has strict rules to ensure claims are fair and justified. Let’s break down the scenarios where food and drink can be claimed, when they can’t, and how to avoid pitfalls.
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The Golden Rule: Wholly and Exclusively for Business
HMRC’s golden rule for business expenses is that they must be wholly and exclusively for business purposes. This principle is the starting point for determining whether food or drink expenses qualify.
• Allowable: A meal during a business trip to another city.
• Not Allowable: A sandwich at your desk during a regular workday.
The distinction often boils down to whether the expense is entirely business-related or also meets a personal need (e.g., eating to survive).
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Subsistence: Claiming Meals While Travelling for Business
“Subsistence” refers to food and drink costs incurred out of necessity during business activities. Here’s what you need to know:
Meals During Business Travel
When you’re travelling for business outside your normal workplace, meal expenses may be claimed. These costs are considered additional and unavoidable due to the nature of the work.
• Example 1: Taking a train to another city for a client meeting and buying lunch there.
✅ Claimable, as it’s an extra cost incurred due to business travel.
• Example 2: Meeting a client at your local café where you regularly work.
❌ Not claimable, as it’s part of your usual workday routine.
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Temporary vs Normal Workplaces
Understanding HMRC’s definitions of “normal” and “temporary” workplaces is key:
• Normal workplace: Your regular, permanent place of work. Meals purchased here aren’t deductible.
• Temporary workplace: A location you attend for a short-term task or specific purpose. Meals bought in these situations are often claimable.
For example:
• Claimable: Lunch during a one-off trip to another city for a meeting.
• Not Claimable: Lunch at your desk or in a nearby café during your usual work routine.
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Reasonable Costs Only
While claiming meals is allowed during business travel, HMRC expects expenses to be reasonable. A modest meal is fine, but frequent fine dining may raise red flags.
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Entertainment: Wining and Dining Clients
One of the most common misconceptions is that meals with clients are deductible. Unfortunately, they aren’t.
Why You Can’t Claim Client Entertainment
HMRC categorises client meals as “entertainment,” which is not a tax-deductible expense. Even if the meal is directly related to business, such as discussing a project, it still doesn’t qualify.
• Example: Taking a potential client to a three-course dinner at a luxury restaurant.
🚫 Not claimable. This is entertainment, not a business necessity.
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Marketing Events: An Exception
There is an exception for events that qualify as marketing activities. If you host a free event to promote your business and provide food or drink, these costs may be claimed. However:
• The event must be free to attendees.
• The purpose must go beyond simply offering food, such as a product demonstration or guest speaker presentation.
Example: Providing snacks at a free workshop to attract potential clients = ✅ Claimable.
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The “Dual Purpose” Rule: Why Everyday Meals Aren’t Claimable
HMRC’s “dual purpose” rule highlights that expenses serving both personal and business needs aren’t deductible. This is particularly relevant for food and drink, as eating is essential for survival and inherently personal.
• Everyday meals: Regular meals consumed during your workday—whether at home, at your desk, or in a café—are not allowable. These are considered personal living costs.
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Meals on Holiday: What You Can and Can’t Claim
If you combine a business trip with a holiday, meal expenses require careful attention. HMRC doesn’t allow you to claim for meals during personal time, even if the trip includes business activities.
• Claimable: A lunch with a client or dinner during a work-related event.
• Not Claimable: Meals during leisure time on the same trip.
Separating business and personal expenses is crucial to avoid HMRC scrutiny.
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How to Stay Compliant: Tips for Claiming Food and Drink Expenses
1. Keep Detailed Records
Always retain receipts for every meal expense and document the purpose of the expense, such as a client meeting or business trip.
2. Check HMRC’s Criteria
Before claiming, ask yourself: Would this meal have occurred without the business purpose? If the answer is no, it’s likely allowable.
3. Be Reasonable
Avoid extravagant spending on meals, as this could lead to a claim being rejected.
4. Separate Business and Personal Costs
If combining business and leisure (e.g., on holiday), keep all personal expenses separate from those related to work.
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In Summary
You can claim food and drink as a business expense in certain scenarios, such as:
• Business travel.
• Temporary workplaces.
• Marketing events.
However, you cannot claim:
• Everyday meals.
• Client entertainment.
• Meals during personal time on a business trip.
By understanding HMRC’s rules and applying them correctly, you can confidently claim allowable expenses without risking penalties.
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