Can I put food and drink through my limited company?

can I put food and drink

What’s your favourite food? Is it a tea or coffee you need to keep your eyes open for your commute in the morning? Or on a night out, what’s your cheeky cocktail of choice?

Now, how much better do all of those things taste when you know they’re being paid for through the business, reducing your tax and VAT bill!

I’m really sorry to have to be the stickler-for-the-rules bookkeeper here, but there is only so much we can claim .. sad, I know! 

But here is our guide to make the most of what you’re entitled to – and to avoid any of us getting into trouble!

So, let’s start with what you CANNOT claim;

  • That coffee or breakfast on the commute to your regular place of work (eg from home to the office)
  • And same for those snacks on your commute between 2 regular places of work (eg from one of your stores to another)
  • Any time your travelling that (although you are a company director and a very important person) really isn’t to do with work (eg having a nice dinner out with your family)

Logically, what you can claim covers the following;

  • Grabbing a bite on your way to a temporary work place, that is different than usual (eg a manager has gone off sick at another site and so you need to go down there for the day, but it’s a significantly further journey than your regular office)
  • Refuelling yourself on other work related trips (eg you go up to Scotland on the train for a training course)

what food and drink can go through my business?

Hopefully, that seems pretty straight forward. To claim for the above, you’ll need to provide a receipt, with an extracted VAT amount, if you’re looking to claim that back too.

You can also claim (within reason being the kicker here!) for;

  • Staff entertaining (eg taking your staff out for lunch)
  • Client entertaining (note; the rules on VAT and tax relief are a little different here, but it’s still better for you to pay through the business than personally)

Aaaaaand, just some final thoughts;

If your ‘staff’ are all family members, and you’re trying to put through every Friday night takeaway, that’s not gonna fly.

If you have no ‘employees’ and are directors only, then including these costs as expenses really are only allowable if you are away for work and therefore have no choice but to eat out etc.

The is an additional ‘£150 per head’ rule known as ‘the annual party exemption’. This does not need to be one event, but it can be a cost of us to £150 per year, per member of staff. This can be a night out, an office party etc, but it MUST be open to ALL members of staff, and the total cost MUST NOT exceed £150 per person, otherwise it’s no longer tax deductible.

I hope this has made things a little clearer, but, as always, any questions, we’re happy to chat!  For more on what you can and can’t put through your business as an expense download a copy of our Expenses Guide.

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