Taxing Times Jan 12

I have recently become self-employed and as part of my work I sometimes have to travel all day to meet customers. Am I able to claim expenses against my income for food that I buy when I am on these trips?

Answer:

Historically, it was considered only possible to make a claim for subsistence costs when the business travel included an overnight stay away from home. However, a deduction could also be available where the business travel is concluded within a day.

For example, Jane leaves home first thing in the morning to catch a train to a distant town where she is to have a meeting with a customer. She buys breakfast at the station and following the meeting with the customer grabs a sandwich and coffee on her way to her next appointment. That appointment continues in to the early evening and, facing a two hour journey home, Jane has dinner on the train.

According to HMRC a deduction is not available where the self-employed prepare their own food at home instead of buying it ‘on the road’. However, HMRC also acknowledge that some self-employed travellers will be undertaking business journeys where a deduction would be allowed: ‘extra costs may be incurred wholly for business purposes where a business is by its nature itinerant or where occasional business journeys outside the normal pattern are made. Modest expenses incurred in these circumstances may be deducted from business profits’.

In Jane’s case that would seem to allow a deduction even though she has not stayed away from home overnight. For many people who have to travel regularly, the costs of food and drink can be huge over the course of a year.

The basic rule is important though: the subsistence will only be deductible as part of qualifying travel. This will inevitably not include home to work travel.

Where a business trip necessitates one or more nights away from home, the hotel accommodation and reasonable costs of overnight subsistence are deductible. The reasonable costs of meals taken in conjunction with overnight accommodation are allowable, whether or not paid on the same bill.

Any reader interested in discussing this topic further can telephone Graham Jennings on 01344 875000 or email graham.jennings@kirkrice.co.uk

Answers are given for general guidance only and specific advice should be taken before acting on any of the suggestions made.