Can I Claim My Lunch As A Business Expense? - More Than Accountants

Can I Claim My Lunch As A Business Expense?

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You are allowed to claim back the money that you used for paying your food, only if you are self-employed. However, you cannot claim for everything that you have eaten. So, what is the process of claiming lunch and counting this as a business expense?

HMRC’s Rules on Claiming Lunch Expenses

As a self-employed, you are capable of claiming back any business expenses you acquire. If you are working through your own limited company, then this can help in decreasing the amount of tax that your company is paying.

Starting April 1, 2017, the UK is using a Corporation Tax rate of 19%, hence, this reduction is beneficial. In your annual accounts, you are allowed to include eligible business expenses which can save your company some money.

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If you are working as a sole trader instead of working through a limited company, then allowable business expenses can help in reducing your sole trader profits. This means that you will be paying less National Insurance and Income Tax when completing your Self Assessment.

When it comes to expenses, the general rule of HMRC is you are only allowed to claim back expenses as long as they are wholly and exclusively used for the purposes of trading. This is why expenses for foods and drinks can be a bit challenging based on these rules due to the fact that we require food and drink to survive.

There are specific situations wherein you are permitted to claim for food and drink expenses. The rule is you can only include meals in your claim as a subsistence, however, it needs to be outside of your regular working routine. Hence, if you attend the same workplace each day, then it is unlikely that you will be allowed to make a claim for any subsistence.

To make things more challenging, there are various rules on expenses depending on whether you are working as a sole trader or working through for a limited company.

What Makes A Workplace Temporary?

The rules of HMRC with regards to classifying whether a certain workplace is temporary or permanent as well as whether expenses can be claimed are quite complicated. According to HMRC, if the duration of continuous work has lasted for more than 24 months at a certain workplace, for instance, the client site, then that particular workplace will not be considered as temporary anymore, additionally, you are not allowed to claim any expenses acquired. A period of continuous work refers to 40% or more of your time.

Likewise, if the presence at a workplace has a certain pattern, for instance, you are required to attend the workplace on the same day every week for more than 24 months, then HMRC may declare that the workplace is permanent and claiming for expenses is not allowed.

So, in case you are spending over 40% of your time at a client’s site, then you are only allowed to claim subsistence, expenses, and tax relief for a period of 24 months. When the 24 months have passed or when you have come to realise that you will be spending over 24 months at a client’s site, then your workplace can be considered as permanent and unfortunately, you will not be able to claim expenses anymore.

Need More Help With Expenses?

When it comes to business expenses, the rules on what you can and can’t claim are complex and may differ depending on a lot of factors. But there’s no need to worry since we can help you in figuring out by providing you with the details on what exactly you are entitled to claim as business expenses and what are you going to do about it.

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