Beating the taxman

The taxman considers eating on the job a taxable benefit, after all you’re paying them to do it.

Type of meeting...

It is hard to define whether a meeting is Social or Personal, but the Taxman does state that there is no tax relief every time work colleagues go out together socially for a meal or a drink at the local.

What the Taxman thinks

The taxman believes that any meal taken with a colleague is going to be mainly related to social and personal considerations. On the whole it is unlikely that it is necessary and exclusive to the performance of the employee’s duties. The cost of the entertainment is admissible if the discussion is work related.

Exceptions

There are exceptions to the rule where no tax liability for entertainment would arise.

1. When discussing a renewal or alteration of a contact.
2. At a briefing visit when the local staff are kept beyond normal hours to fit in with a visit of a director general.

Conditional Exceptions

The taxman realises that there are times when food is second to work and so accepts that occasionally meals may qualify as a business expense. The condition is that you prove to the taxman that no social or personal considerations were involved in the meal.

Meeting the conditions...

When the meal is mainly business orientated it is a good idea to claim a deduction. Where the client is entertained, the taxman generally accepts the condition is met.

Lunch Time Training

Many organisations provide training sessions during lunch breaks. They lay on sandwiches and over types of food to encourage the staff to give their lunch hour up for training. In this scenario when there is some genuine training session in progress it is difficult for the taxman to prove any social aspect at all and so the condition is met.

Working Late

If a member of staff works late and is provided with a meal as a reward it is taxable, unless it’s an annual affair within the £150 per employee exemption.

The taxman checks...

The taxman can be expected to check such cases to see who attends and for proof of the nature of the work carried out. It is considered a tax liability for the staff enjoying the free lunch unless facilities are provided for all employees (which they don’t all have to turn up for).

Rule extension

It is a possible argument that sandwiches and other refreshments provided could perhaps be exempt from tax under the work-related training exemption. In these cases the rules are extended to include costs that are supplementary to the training.