Subsistence Claim - The Book-keepers Forum (UK)

Leger · Master Book-keeper

Subsistence Claim

Kinbuck · Senior Member

Hi John
I would say yes as long as it's reasonable and he's not doing the weekly shop! Ultimately it's a cost incurred as a result of travelling for the business.

I've got a client who prefers to stay in apartments rather than hotels and at the end of his day doesn't want to interact with anyone. He likes to cook for himself...but I didn't allow the bottle of gin that was on the receipt! :)

Leger · Master Book-keeper

Thanks Janet, I thought so too but just wanted to double check.

I thought you were allowed one glass with your meal, maybe he had a litre size glass biggrin biggrin

Kinbuck · Senior Member

Leger wrote:

I thought you were allowed one glass with your meal, maybe he had a litre size glass

Man after my own heart smile

Cheshire · Master Book-keeper

Hi John
Is this one limited or sole trader? If limited is he a sole director/shareholder.

Also, did anyone else go with him?

Where did he buy the food? Did he take it with him pr buy it in the town the accommodation was located? Does he have receipts for all the expenditure?

Artois · Guru

I seem to vaguely remember reading that if food was purchased for cooking whilst working away that it would not be allowable due to the fact that it is no different to what you would be doing in your own home, however I have had a quick look and can't seem to find any information relating to this so maybe it was just an article that I was reading and nothing to do with HMRC.

Leger · Master Book-keeper

Hi Joanne

Sole Trader

Took 2 CIS subbies with him and paid for their food and accommodation. Food bought from grocery store local to where they were staying. I have a receipt. This is the first one as I have only recently started booking him in through airbnb instead of hotels as a/ it's cheaper and b/ he prefers them.

Hi Doug

HMRC viewpoint is you have to eat to live. As I'm sure you're aware, breakfast and evening meals are allowable but whether that's extendable to buying food in to cook in a microwave I don't know, but it is less than the cost of eating out so can see no reason myself why not allowable, however I'm confident that Joanne will put me straight if I'm wrong biggrin biggrin

Cheshire · Master Book-keeper

Kinbuck wrote:
Hi John
I would say yes as long as it's reasonable and he's not doing the weekly shop! Ultimately it's a cost incurred as a result of travelling for the business.

I've got a client who prefers to stay in apartments rather than hotels and at the end of his day doesn't want to interact with anyone. He likes to cook for himself...but I didn't allow the bottle of gin that was on the receipt! :)

Hi Janet

same Qs to you re your client as I asked John. Plus, it is occasional travel, not in the course, blur blur, fully meets the criteria of allowable travel?

Cheshire · Master Book-keeper

Leger wrote:
Hi Joanne
Sole Trader
Took 2 CIS subbies with him and paid for their food and accommodation. Food bought from grocery store local to where they were staying. I have a receipt. This is the first one as I have only recently started booking him in through airbnb instead of hotels as a/ it's cheaper and b/ he prefers them.

Hi Doug
HMRC viewpoint is you have to eat to live. As I'm sure you're aware, breakfast and evening meals are allowable but whether that's extendable to buying food in to cook in a microwave I don't know, but it is less than the cost of eating out so can see no reason myself why not allowable, however I'm confident that Joanne will put me straight if I'm wrong

Hi John

so these are not employees that he took, so personally I would say he cannot claim W&E for the accommodation as effectively some of the cost of that is not for him, ergo he cannot claim the food. (Scuppers the vat A on your other post potentially as well). Or am I misunderstanding their positions?

Back to the original point. I had the same thoughts as Doug but couldn't find supporting evidence with a few quick searches and not having time to delve into case law. Where I was coming from was the general packed lunch rule, which essentially is....no deal,the claim is out, you cannot claim the food bill for making your sarnie, even if that is less than the (reasonable costs) restaurant meal you were trying to save money on. Certainly Ive seen something about making your packed lunch from items you bought on home turf is a no, but making it from shopping you did whilst in the place far far from home could be allowable. Two problems arise, it has to be properly quantifiable. Plus there can be no duality of purpose.

Normally making a packed lunch cannot be quantified properly.....half a packet of meat ....what happens to the other half.

What happens to the other slices of bread?

In this case you are feeding two other unrelated people, so it's also entertaining. Well, actually strictly speaking it isn't, as they re business associates so there could be an argument that it's wholly personal expenditure.

Unfortunately the 'cost less' approach doesn't always work in your favour. My personal view is that if you have no business premises and arrange a meeting in a coffee shop that one should be able to pay for a coffee, fully expense it and it be allowable as it's cheaper than paying rent. Unfortunately HMRC will disagree.

Did you find anything useful Doug? I would b surprised if Tolley didn't have something. Maybe try under packed lunches?

Kinbuck · Senior Member

Cheshire wrote:
Hi Janet
same Qs to you re your client as I asked John. Plus, it is occasional travel, not in the course, blur blur, fully meets the criteria of allowable travel?

Hi Joanne

Sole trader (specialist drainage) who sometimes gets work in the south of the country. When I researched it my understanding was that as it isn't part of his everyday working pattern and he is only travelling to complete the business he could claim accommodation and reasonable overnight subsistence costs. He's normally away 3 or 4 nights and produces receipts for everything. Items tend to be protein, pasta and veg then bacon and eggs for breakfast! Nothing unusual until the gin appeared on the receipt...but he did say he'd meant to score it off :)

Thinking about a partnership (gift shop) that I've just started to work with. They sometimes do 'buying trips' to suppliers/exhibitions. I would allow them accommodation and overnight food costs - is that allowable?

Thanks

Artois · Guru

Cheshire wrote:
Did you find anything useful Doug? I would b surprised if Tolley didn't have something. Maybe try under packed lunches?

Not had the chance to have a good look as yet

Going up the library later for some peace and quiet (kids half-term) to do a mock practice exam so will have Tolley's tax books with me and will be able to have a better look when I am finished.

Leger · Master Book-keeper

Cheshire wrote:
Leger wrote:
Hi Joanne
Sole Trader
Took 2 CIS subbies with him and paid for their food and accommodation. Food bought from grocery store local to where they were staying. I have a receipt. This is the first one as I have only recently started booking him in through airbnb instead of hotels as a/ it's cheaper and b/ he prefers them.

Hi Doug
HMRC viewpoint is you have to eat to live. As I'm sure you're aware, breakfast and evening meals are allowable but whether that's extendable to buying food in to cook in a microwave I don't know, but it is less than the cost of eating out so can see no reason myself why not allowable, however I'm confident that Joanne will put me straight if I'm wrong
Hi John
so these are not employees that he took, so personally I would say he cannot claim W&E for the accommodation as effectively some of the cost of that is not for him, ergo he cannot claim the food. (Scuppers the vat A on your other post potentially as well). Or am I misunderstanding their positions?

Hmmm, can I throw a spanner in the works?

Sometimes an employer will incur subsistence type expenditure for a number of employees at the same time. For example, a film company on location may block book a hotel. In such circumstances there will be a single tax invoice from hotel to employer. The employer can claim input tax on the expenditure even if some of the individuals are VAT registered.

https://www.gov.uk/hmrc-internal-manuals/vat-input-tax/vit13400

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim45045 (see also BM45046)

It's slightly different on the food, and I hear what you say on that, but would the "Similarly, meals given to a self-employed person contracted for a particular piece of work may be regarded as part of the cost of that contract" suffice?

EDIT. The quote from VIT13400 has quotation marks on the employer/employee bits, which I've just noticed has been stripped out. It's referring to subbies and freelancers.

-- Edited by Leger on Wednesday 31st of October 2018 07:52:48 PM

Artois · Guru

Hi all

I have had a look at the Tolley Tax books and I cant seem to find anything about food being cooked whilst being away on business being disallowed, I have found quite a few articles saying that it is not allowed (hence my reply yesterday) as well as some about packed lunches prepared at home as Joanne said but none seem to back it up with any reference to the legislation, so on this basis I would agree that as long as reasonable amounts and with receipts then I cant see an issue.

With the accommodation, I have had loads of subbies working away and quite a few of them have had there rooms and food paid for by the main Contractor

Hi Janet

With your partnership, the one question I would ask would be does it take both of them (I am assuming two) to attend these buying trips or are they just treating it as little breaks away, if your happy that all the cost are business related and necessary then I cant see a problem

Leger · Master Book-keeper

Artois wrote:
Hi all
I have had a look at the Tolley Tax books and I cant seem to find anything about food being cooked whilst being away on business being disallowed, I have found quite a few articles saying that it is not allowed (hence my reply yesterday) as well as some about packed lunches prepared at home as Joanne said but none seem to back it up with any reference to the legislation, so on this basis I would agree that as long as reasonable amounts and with receipts then I cant see an issue.

Thanks Doug, much appreciate you looking into it further.

Kinbuck · Senior Member

Artois wrote:
Hi all
I have had a look at the Tolley Tax books and I cant seem to find anything about food being cooked whilst being away on business being disallowed, I have found quite a few articles saying that it is not allowed (hence my reply yesterday) as well as some about packed lunches prepared at home as Joanne said but none seem to back it up with any reference to the legislation, so on this basis I would agree that as long as reasonable amounts and with receipts then I cant see an issue.
With the accommodation, I have had loads of subbies working away and quite a few of them have had there rooms and food paid for by the main Contractor
Hi Janet
With your partnership, the one question I would ask would be does it take both of them (I am assuming two) to attend these buying trips or are they just treating it as little breaks away, if your happy that all the cost are business related and necessary then I cant see a problem

Thanks for the information Doug.

It is two in the partnership. As I'm just starting with them I've got a few things to iron out so I'll discuss it with them. smile