By NextGen Accountants
Updated January 2026
Taking clients out for lunch, grabbing food while travelling, or paying for staff meals is part of everyday business life. But when it’s time to prepare your accounts or file your tax return, one question always comes up:
Can I claim this lunch as a business expense?
The honest answer is: it depends.
Many business owners either miss out on legitimate claims or accidentally claim expenses that HMRC will disallow. Food and drink expenses are one of the most confusing areas of UK tax, so getting this right matters.
This guide explains:
- When a business lunch is tax deductible
- The difference between subsistence and entertaining
- When VAT can (and can’t) be reclaimed
- How to reduce your tax bill legally and safely
The Key Difference: Subsistence vs Entertaining
HMRC treats food expenses differently depending on who is eating, where, and why.
Understanding this distinction is the foundation of claiming meals correctly.
1. Subsistence (Meals While Travelling for Work)
This is the most common allowable meal expense.
What is subsistence?
Subsistence covers meals eaten while you are travelling for business and are away from your normal place of work.
Can you claim it?
Yes, as long as you are outside your normal working pattern.
Example
A Leeds based consultant travels to London for a client meeting. Lunch purchased at Paddington Station between meetings is classed as subsistence and is tax deductible.
The catch
You cannot claim for:
- Lunch at your permanent office
- Meals during your normal daily commute
How to claim
- Claim the actual cost of the meal (keep receipts), or
- Employees can use HMRC benchmark scale rates if conditions are met
2. Employee Entertaining (Staff Parties & Events)
Can you claim it?
Yes.
Businesses can claim the cost of staff events such as:
- Annual parties
- Christmas events
- Team celebrations
The £150 rule
- Up to £150 per head per tax year (including VAT)
- Must be open to all employees
⚠️ If the £150 limit is exceeded, the entire amount becomes taxable, not just the excess.
3. Client Entertaining
This is where most people get caught out.
Can you claim it?
No (in most cases).
Meals with:
- Clients
- Prospective clients
- Suppliers
- Business contacts
are classed as business entertainment.
Tax treatment
- ❌ Not deductible for Corporation Tax
- ❌ VAT is not reclaimable
Why still pay through the business?
Even though there’s no Corporation Tax relief, paying via the company is often more tax efficient than paying personally (explained below).
4. Office Food & Canteen Meals
Can you claim it?
Yes, if conditions are met.
Meals provided on site can be allowable when:
- Food is available to all employees
- It is not just for directors or selected staff
This includes:
- On site canteens
- Free or subsidised meals for staff
5. Trivial Benefits (Under £50)
Can you claim it?
Yes.
Trivial benefits are small perks such as:
- Lunch for an employee
- Birthday treats
- Occasional meals
The rules
- Must cost £50 or less (including VAT)
- Cannot be cash
- Cannot be a reward for performance
For directors of limited companies, this can be a very effective tax free perk when used correctly.
Can I Claim a Business Lunch with a Client?
Short answer
You can pay for it through the business, but you cannot deduct it from taxable profits.
Detailed explanation
Client lunches must be:
- Recorded in the company accounts
- Added back when calculating Corporation Tax
Rare exception: “Quid Pro Quo”
In limited cases, food provided to a non employee (such as a contractor) may be allowable if:
- It is contractually required, and
- It forms part of their payment for services
This is a grey area and should always be reviewed by an accountant before claiming.
If It’s Not Tax-Deductible, Why Not Pay Personally?
This is a smart question.
If you pay £100 for a client lunch personally, that money has already been taxed through salary or dividends.
If the company pays:
- The company gets no Corporation Tax relief
- But you don’t need to extract £100 of taxable income
👉 Result: you save personal Income Tax and National Insurance.
What Counts as a “Reasonable” Meal?
HMRC doesn’t set strict limits, but reasonableness matters.
Subsistence meals
- Sandwiches, standard lunches, or normal dinners are acceptable
- Luxury or extravagant meals may be challenged
HMRC benchmark rates (guidance only)
- £5 – breakfast (leaving before 6am)
- £5 – 5+ hours travel
- £10 – 10+ hours travel
- £25 – 15+ hours travel / finishing after 8pm
Record-Keeping: What HMRC Expects
To protect yourself during an HMRC check, you must keep:
- Receipts (digital copies are fine)
- Date and location of purchase
- Names of attendees
- Clear business purpose
- Valid VAT invoices (if reclaiming VAT)
Good records turn a risky claim into a safe one.
Final Thoughts: Make Your Expenses Work for You
Business lunch expenses don’t have to be a headache.
✔ Claim subsistence when travelling outside your normal routine
✔ Use the £150 staff party allowance properly
✔ Take advantage of trivial benefits under £50
✔ Put client entertaining through the business to save personal tax
When handled correctly, everyday expenses can significantly improve your tax efficiency.
Need Help Reviewing Your Expenses?
At NextGen Accountants, we help UK businesses:
- Identify allowable expenses
- Avoid HMRC penalties
- Maximise tax efficiency legally
📞 Phone: +44 208 123 7363 / +44 786 269 6795
📧 Email: info@ngaccountants.co.uk
📍 Address: Office 5046, 321–323 High Road, Chadwell Heath, Essex, RM6 6AX
📧 info@ngaccountants.co.uk
📞 +44 208 123 7363 | +44 786 269 6795
Disclaimer: This blog is for general information only and does not constitute professional advice. NextGen Accountants accept no liability for any loss arising from reliance on its content — please seek tailored advice before making decisions
