Group of tables and chairs in the sky garden for business meals

Expenses: What about Business Meals?

Victoria Scally News

You may have heard that business meals are allowable as a business expense.

This is partly true.

Firstly we should talk about what a ‘business meal’ is?

We are talking here about situations where you might, for example, pay for a meal to discuss a project or maintain a business connection.

This type of expenditure can be classed as a business meal and is generally termed ‘business entertainment’.

Entertainment can be more than just a business meal and a drink, but is the most common type we see.

This expenditure will be shown in your accounts, but is disallowable against your tax (personal or corporate) and in most circumstances, no VAT can be reclaimed.

If you are a limited company, there is still some good news, as you haven’t paid for this meal out of your ‘taxed’ income (where you potentially could have paid personal and corporation tax).

Sadly there is no such good news if you are a sole trader/self-employed.

In terms of record-keeping, HMRC advise keeping a record of who was ‘entertained’ and what was discussed.

If you are entertaining employees only, its generally the reverse – all allowable (but more on this another day!).

If you have any questions on business entertainment, please get in touch.