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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 lunch as a business expense?
HMRC’s rules on claiming lunch expenses
Being self-employed gives you the ability to claim back any business expenses you incur. If you work through your own limited company, this reduces the amount of tax your company pays.
The Corporation Tax Rate is currently 19-25% in the UK for the 2023/24 and 2024/25 tax year. You can get more information about which rate applies to your limited business here.
With the rates upwards of 19% for businesses it's well worth reducing your profits by claiming allowable expenses. Every eligible business expense can be included in your annual accounts to save your company some precious pennies.
If you work as a sole trader rather than through a limited company, allowable business expenses will reduce your sole trader profits, meaning you’ll pay less Income Tax and National Insurance when you complete your Self Assessment.
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 under 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 attending the same workplace every day, it’s unlikely that you can claim any subsistence as an allowable expense.
To make things even trickier, there are different rules on expenses depending on whether you operate as a sole trader or limited company. We’ve written more detailed articles on expenses you can claim as a sole trader and expenses you can claim as a limited company.
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What makes a workplace ‘temporary’?
HMRC’s rules about whether a workplace is permanent or temporary (and whether expenses can be claimed) are complex. HMRC says 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 for any expenses incurred. A period of continuous work means 40% or more of your time.
Similarly, if attendance at a workplace follows a ‘pattern’ – for instance, you must attend the workplace on the same day each week for more than 24 months – then HMRC may decide the workplace is permanent and no expenses can be claimed.
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 expenses.
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