Can your Clients claim their lunch as a business expense?

food and drink expenses

Claiming for the amount clients spend on food is allowed when they’re self-employed, however, you can’t just claim for everything they eat. So, what’s the deal?

HMRC’s general rule is that you can only claim for expenses that are “wholly and exclusively” for the purposes of trade, this makes food and drink expenses a tricky one, since everyone needs food and drink to survive.

There are certain situations where you can claim for food and drink expenses, but it has to be outside of the clients normal working routine. So, if they’re based at the same workplace every day, it’s unlikely that you can claim any food and drink as an allowable expense.

HMRC’s rules about whether a workplace is permanent or temporary (and whether expenses can be claimed) are complex. HMRC says that if a period of continuous work lasts for more than 24 months at the same workplace, that workplace isn’t temporary, and you can’t claim for any expenses incurred. A period of continuous work means 40% or more of their time is spent there. If attendance at a workplace follows a ‘pattern’, e.g. they attend the same workplace on the same day each week for more than 24 months, then HMRC may decide the workplace is permanent and no expenses can be claimed.

So, if they spend more than 40% of their time at a workplace, you can only claim expenses, subsistence and tax relief for a period of 24 months. After 24 months, or when you become aware that they’ll be spending more than 24 months at the workplace, the workplace is classed as permanent and you can no longer claim expenses.

If you would like any further clarification, please do not hesitate to contact us.

Lucy



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