Expense claim for food

[ShelleyM]

I am a sole trader and work mainly at home. I do craft shows where I am out for something like 10-12 hours at a time at different places some weekends. I know I can claim 45p a mile there and back to the various venues, but can I claim for any food expenses during the day? Mainly for snacks and drinks, sometimes a meal. I usually try and take sandwiches, but sometimes the day is so long I need more. At these sort of venues it would be very difficult to obtain a receipt so I wondered if £5 a day while away would likely to be allowable?

Thanks

Shelley

 

[Robert Pearce]

For sole traders, apart from a few exceptions (such as overnight business trips), HM Revenue & Customs generally takes the view that you need to eat and drink to live so it is not an expense incurred wholly and exclusively for business purposes:

http://www.hmrc.gov.uk/manuals/bimmanual/BIM47705.htm

 

[Business News]

If you were to convert your business to a Ltd company then you can dine free for life. HMRC rules are subsidised meals, which includes up the 100% subsidy, is fine so long as all employees have this offering available to them. That came out of a tax inspection I went through two years ago where they questioned lunch expenses for meetings but said we could have called in food to the office; so long as everyone gets to dive in.

 

[GreenLea]

As the others have said no as its not wholly and exclusivly for purspose of business you need to eat! Its different rules for employees : )

 

[fairdealworld]

I'm finding the advice you've been given a bit odd unless there has been some very recent new ruling by HMRC.

I'm a sole trader and I've always claimed for:

meals/snacks when I used to drive a delivery round in support of my shop and was away from base for more than four hours or so;

meals/snacks (and accommodation if necessary) and parking charges when attending conferences or visiting suppliers at a distance to select stock or discuss issues or even just to do a bit of sleuthing round other shops (at a substantial distance from my own obviously) to see what they stocked and how they displayed it;

an evening meal if I was working exceptionally long hours at my shop and needed to go out and eat before returning to work late into the evening or even the small hours on occasion (my business is 20 miles from my home along a busy route so no chance of just popping home for a meal);

meals/snacks if I was running a stall at an event at a distance from my business or at some sort of exhibition or trade show or visiting such events as a potential customer;

All these claims have only been as genuinely required by circumstances. Obviously I expect to take a lunch (or even a breakfast if in a hurry) to my shop or to make one there (but the kettle, microwave, toaster and refrigerator and the odd mug or plate or bits of cutlery or washing up bowl in the shop 'kitchen' have gone in as businesses expenses over the years too). If expecting to work very late I'd usually take food from home for an evening meal too. I prefer home cooked stuff to 'takeaway' and when really under pressure I don't have time to go out even for quick meal, but there are exceptions to every rule and if the hours I'm working are such that I just can't organise packed food or whatever for myself then I'd expect to be able to claim for a 'reasonable' meal;

Over time the number of such claims have gone down a lot, and were never that high in the first place, partly because I no longer drive the delivery round, partly because I now rarely go to 'outside' selling or exhibiting events, partly because I've got the microwave, kettle and toaster in the shop store room : - )

My accountant always said that such 'reasonable' expenditure was okay. A couple of years into running my business we did have a VAT Inspection. I asked the Inspector particularly about such claims and she was very definite that 'reasonable' claims were okay. She mentioned seeing lots of receipts for McDonald's and coffee shops when doing inspections. I specifically asked her if my odd receipt for a meal at something like a Beefeater or a Pizza Express or a pleasant but not OTT Chinese Restaurant or, of course, one of those extremely expensive but very basic eateries at a trade show was acceptable and she replied without missing a beat 'oh yes that's perfectly reasonable' but added that dinner at The Savoy would require a lot of justification : - )

The point this inspector particularly made was of the reasonableness of a claim and the reasonableness of your overall level of claims.

 

[David Griffiths]

VAT inspectors generally know little about income tax.

The advice given above is correct - a sole trader cannot claim the cost of food. This is backed up by a court case relatively recently (for tax cases!) of Caillebotte v Quinn.

Just because you've claimed it and got away with it (it is self assessment after all) doesn't mean that it was correct. If the Revenue looked at your returns you could end up with the lot being disallowed.

 

[Cov2000]

My accountant's always put this through at £10 per day. It depended on how long you were away from the base for but over 8 or 10 hours it was £10 for subsistence, totalling £2400 for the year (5 days a week, 48 weeks of the year)

 

[fairdealworld]

I think the moral of this thread is that the self-employed are in a remarkably difficult position because of the near impossibility of getting accurate advice on such topics!

My accountant has always 'approved' my inclusion of subsistence costs. Clearly some accountants say one thing and some accountants say different.

 

[Scalloway]

This is HMRC guidance on the self employed claiming subistence

http://www.hmrc.gov.uk/manuals/bimmanual/bim47705.htm

But extra costs may be incurred wholly for business purposes where a business is by its nature itinerant (for example in the case of commercial travellers), or where occasional business journeys outside the normal pattern are made. Modest expenses incurred in these circumstances may be deducted from business profits.

I guess a sandwich and a coffee at lunch time could be claimed but a 3 course meal at the best restaurant in town would be disallowed.

 

[BustersDogs]

I have had all my food claims disallowed by my accountant if I buy them in my town, even if it's for later on when I'm miles away. Even if I was out on business all day. I now have to travel, and buy lunch out. Which is tricky when you spend all day in a field in the middle of nowhere (usually at least 50 miles away, sometimes more).

He also said 'well you have to eat you coud make a packed lunch'. I usualy spend around a fiver on lunch, which he allows (I think). I argued it's difficult to get your picnic out when wet and muddy, so a sandwich from a shop is much more convenient.

Of course he could be disallowing it still and not telling me, but now most of my training is done it doesn't come up very often anymore.

 

[Deleted member 59730]

I guess a sandwich and a coffee at lunch time could be claimed but a 3 course meal at the best restaurant in town would be disallowed.

Why? When I am at home I eat in the best place in town. Shouldn't I expect the same standard anywhere else?

 

[offshoreaccouting]

As the others have said no as its not completely and exclusivly for purspose of enterprise you need to eat! Its different guidelines for workers : )

 

[Truemanbrown]

As someone has already remarked in this thread, it may be beneficial if the OP transferred his business into a limited company because the rules for an employee/director claiming travel and subsistence expenses are different.

 

[internetspaceships]

If the OP is worried about the price of lunch then maybe they need to look at the broader pitcture i.e. is it worth running the business.

 

[wyld]

As I understood this if you was away for the day over a 10 mile radius from you normal place of work then you could claim subsistance of £8 - £10 per day. If you was taking a business lunch/dinner with a prospective client from the UK you cannot claim that meal as expenses but if it was a overseas client the whole lunch/dinner can be claimed as expenses.

On this food and drink subject I also understand if you have clients come to your business premises you can claim a small amount for tea/coffee milk sugar of about £15 - £20 per month and in some cases Newspapers and Magazines for them to read while waiting

I may be a little out of date here but this was told to me by a Tax Inspector a few years ago!

BTW BoredomBusters middle of a muddy field is your normal place of work so I can understand why your accountant tossed out your subsistance lol

 

[David Griffiths]

but if it was a overseas client the whole lunch/dinner can be claimed as expenses.
. . .

I may be a little out of date here but this was told to me by a Tax Inspector a few years ago!

My memory is that tax relief for entertaining overseas customers was abolished when Harold Wilson was Prime Minister!