Can I claim my lunch expense as a business cost?

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

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 some 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 to apply to those rules, since everyone needs food and drink to survive.

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.

how to setup a 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 (i.e. client site), that workplace isn’t temporary and you can’t claim expenses, subsistence or 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’ll be spending more than 24 months at a client’s site, your workplace is permanent and you can no longer claim them.

set up a limited company
Newsletter Subscription - Accounting Wise

Join Our Newsletter!

Get expert accounting tips, tax updates, and business insights straight to your inbox. Sign up today and stay one step ahead!

Newsletter Signup

Hot Topics

More related Accounting Community, News & Resources

Accounting Wise - what is a unique taxpayer reference (UTR)

What Is a Unique Taxpayer Reference (UTR)?

When starting a business or becoming self-employed in the UK, there are plenty of forms and numbers you need to keep track of. One of the most important identifiers you’ll encounter is the Unique Taxpayer Reference (UTR) number.
Accounting Wise - What are the Benefits of Paying Corporation Tax Early

What are the Benefits of Paying Corporation Tax Early?

Discover why UK companies choose to pay corporation tax early. Learn the benefits, HMRC interest rules, and how early payment can support your business.
Accounting Wise - what is national insurance

What is National Insurance?

This National Insurance overview aims to provide a detailed understanding of National Insurance, covering its purpose, the rates at which contributions are calculated, and the impact it has on your entitlement to state benefits and retirement planning.