Lunches, dinners, and refreshments (also known as subsistence) are all expenses that you would incur whether you were running a business or not. If we refer back to the previous week’s blog, (What can I claim as a business expense?) you need to ask the following when considering such expenditure.
Has this expenditure contributed to my business in any way?
Have I received any income directly (or indirectly) from this expense?
Would I have paid for this, if I had NOT been running a business?
Let’s take some examples
You work from home or have an office/clinic (which is where you are based most days). You buy coffee, biscuits and food from the local supermarket once a week. Can this be claimed? No.
You work from home or have an office/clinic (which is where you are based most days). You have staff and/or clients come to your office/ clinic and you have a small stock of coffee/tea/ water and biscuits available for them. Can this be claimed? Yes.
You work from home or have an office/clinic (which is where you are based most days). You realise you have nothing in the cupboard one day, or you forgot your lunch, so you go out to the local café for some food. Can this be claimed? No.
You work from home or have an office/clinic (which is where you are based most days). You meet current, or potential, clients in a coffee shop because you don’t have the facility to meet clients in your place of work. Can this be claimed? Yes, but only your coffee, and ensure you have your breakfast, lunch or dinner before you go. Your business is not a means to have convenience food bought for you.
You go to an official networking event and buy a coffee. Can this be claimed? Yes, only your coffee.
You go to an official networking event which is over lunch or dinner. Can this be claimed? Yes, only your lunch/ dinner though. This applies if the fee includes the lunch/dinner, or if there is no fee and you just pay for your meal, but it has been professionally organised.
You go to a pub/ café and just to happen to start talking to a stranger about business and realise they could be a potential client. Can this be claimed? No, you were in the pub/café through personal choice.
You go to a training event to learn a new skill so that you can add value to your clients and you have nowhere to heat up your lunch, so you have to buy your lunch in a local café. Can this be claimed? Yes, as you were inconvenienced.
You go to a training event to learn a new hobby and you buy your lunch in a local café. Can this be claimed? No, and neither can the training event!
An emergency comes up at your place of work and you have to stay a few hours later than planned to help a client. It’s now 6.30pm and you have a few more hours work to do that needs to be done tonight. You are hungry and need some food. You call the local takeaway and get a small pizza delivered. Can this be claimed? Yes, as you were inconvenienced. However if you work late regularly, then no, as that’s your choice.
You take your staff out for lunch to brainstorm ideas for your business, or to thank them for all their hard work. Can this be claimed? Yes
I have attempted to cover the most common scenarios but there are so many! If in doubt, however always ask an accountant.
© Helen Monaghan
HAVE YOU SIGNED UP YET FOR THE FREE 12 WEEKS SUPPORT TO IMPROVE YOUR CASHFLOW? SIGN UP HERE TODAY!