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Food and drink

It's not the catchiest of titles, but does what it says on the tin (see what I did there?)

There's lots of confusion around this issue.

  • Is it allowable?

  • Is it not allowable?

  • Under which circumstances can I buy myself a coffee?

Let's dig a little deeper, shall we?

John is a builder, and the director of a limited company. He's been looking at a new supplier for his building supplies, and wants to secure the very best deal that he can. He decides to take out the boss of the supplier that he has his eye on, to buy him a really nice meal, and see if they can build a relationship and come to some kind of mutually beneficial arrangement.

He can claim this, right?


He can't claim it, because it's classed as business entertainment, and HMRC block the tax relief on this.

The definition of Business Entertainment is 'the provision of free or subsidised hospitality or entertainment'.

Hospitality includes the provision of food, drink or similar benefits for which no payment is made by the recipient. The criteria is wide and far reaching, and can include items such as a day out at the races, taking a supplier for lunch etc.

John could, however, pay personally, and reclaim the expense as being incured in the performance of his duties as a director. But the expense would be disallowed in the company profits, so actually, he's no better off, the net result is exactly the same.

Jut because the expense is incurred for business purposes does not make it tax deductible.

Working away

Sarah is working away from home, and will be doing so all week. It's a long commute, so she has decided to stay in a hotel to maximise downtime and enable her to remain fresh and ready for the following day.

She orders room service, and settles down for the evening.

She can claim this, right?


HMRC will allow the cost of hotel rooms and meals on overnight business trips.

There are lots of different rules about workplace venues, so it's always worth speaking with a professional about it.


On this occasion it's an allowable expense because it's incurred as part of the business.

However, if this was a regular commute to a base of operations, then it would be viewed very differently, but occasional trips to the same place are allowable business expenses.

Expenditure such as buying yourself a coffee on your regular commute is not an allowable expense, and neither is the sandwich you purchased at the same time because you were running late.....

Staff Parties

Bob has a handful of employees, and wants to treat them because they've worked really hard during the year, so he's decided to hold a summer barbecue.

He hires the relevant equipment, dons his apron and sets to work with his amazing chef-like skills to cook for his guests.

Is this allowable.


Staff parties are allowable if the following conditions are met:

  • The event should be open to all your employees

  • It should be annual, such as the event we've discussed, or a Christmas party

  • It should cost less than £150 per person.

These conditions are also applicable to online or virtual parties.

He could even provide two such celebrations during the year, as long as the combined cost of the events is no more than £150 per head.

But what if they're over £150 per head?

If the events for the year total more than £150 for the year, then the company is obliged to report the events to HMRC under the P11d scheme, and Class 1A National Insurance is due at the appropriate percentage on the total sum of the events.

It's worth noting that the cost per head includes any transport provided to and from a venue, overnight accomodation, and be inclusive of VAT. Itmust also be divided by the number of attendees who attend, not the number who were invited.



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