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Can I claim my lunch as a business expense?

Claiming back the money you spend on food is allowed if you are self-employed – but you can’t just claim everything you eat. So what’s the deal with claiming lunch as a business expense?

Being self-employed gives you the ability to claim back any business expenses you incur, which reduces the amount of tax your company pays. From 1st April 2017, the corporation tax rate is 19%. You can include every single business expense that qualifies in your annual accounts, reducing the amount your company pays tax on and saving your company precious pennies.

HMRC’s general rule when it comes to expenses is that you can only claim back expenses that are “wholly and exclusively” for the purposes of trade. That’s why food and drink expenses can be a tricky one, as everyone needs food and drink to survive, making it hard to apply HMRC’s rule.

There are certain situations where you can claim for food and drink expenses. The rule is that you’re allowed to claim a meal as subsistence – but it has to be outside of your normal working routine – so, if you’re travelling to and from the same workplace every day, it’s unlikely that this will be classed as an allowable expense.

To make things even trickier, there are also different rules depending on whether you operate as a sole trader or limited company.

What makes a workplace ‘temporary’?

HMRC rules about whether a workplace is permanent or temporary and whether expenses can be claimed are complex. HMRC say that if a period of continuous work lasts more than 24 months at a workplace (ie. client site) then that workplace is not temporary and you cannot claim expenses, subsistence and tax relief. A period of continuous work means 40% or more of your time.

So, if you spend more than 40% of your time at a client’s site, you can only claim expenses, subsistence and tax relief for a period of 24 months. After 24 months, or when you become aware you will be spending more than 24 months at a client’s site, your workplace is permanent and you cannot claim expenses, subsistence and tax relief.

Need more help with expenses?

The rules on what you can and cannot claim as business expenses are complicated and vary depending on a number of factors. Our handy business expenses guide will help you figure it out by giving you detailed instructions on exactly what you’re entitled to claim as business expenses and how to go about doing it.

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