Lunch expenses

[TheFaQQer]

What works is what we have now.

Not according to HMRC it doesn't.

[Snarf]

My definition would be: working 4 or more days a week at the same place ('client office') closer than 25 miles from home ('permanent workplace')

If your contract is longer than 6 months then negotiate your rate accordingly or take the tax hit, or go sit on the bench for a month until you find a contract somewhere else to reset your 6month clock

It'd catch 90% of contractors doing disguised commutes and leave the people who travel a long way/get hotels able to take the contracts down south etc

Well that's a bit mental... Using your 25 miles from home rule I could pretty much rule out two major cities..

Are you suggesting to be a proper contractor you have to travel great distances and stay away from home?

[pr1]

Well that's a bit mental... Using your 25 miles from home rule I could pretty much rule out two major cities..

Are you suggesting to be a proper contractor you have to travel great distances and stay away from home?

If you live closer than 25 miles then your commute probably isn't costing that much relative to your turnover (ie it's in the same ballpark as a permie)

I'm suggesting that if your contract is going to last longer than 6/12 months you should be able to either incorporate the cost into your rate or take the tax hit at the advantage of repeat/continued/long term business.

It's just my opinion, it's not going to happen I just think it's a fairer way than is currently proposed

[SueEllen]

If you live closer than 25 miles then your commute probably isn't costing that much relative to your turnover (ie it's in the same ballpark as a permie)

I'm suggesting that if your contract is going to last longer than 6/12 months you should be able to either incorporate the cost into your rate or take the tax hit at the advantage of repeat/continued/long term business.

It's just my opinion, it's not going to happen I just think it's a fairer way than is currently proposed

Permies where I live pay anything from the cost of a pair of shoes to £6,000 to go to work simply because not everyone works within 25 miles of where they live.

Anyway HMRC are unhappy because their tax rules haven't kept up with the modern world of work and the fact that money saving sites are reminding permies to claim cost of washing uniform at home, cost of working at home, mileage etc as well.

HMRC shouldn't throw the baby out with the bath water but are too thick to realise you should allow people to easily claim somethings so they go to work, but change the rules on other things. Other people on here have put forward a more commonsense and money saving approach...

[vwdan]

I claimed whenever I could get a receipt. The promise I made to myself is that if I'm going to work away a lot, then I'm at least going to go to some effort to enjoy it - i.e., not think twice about going somewhere decent for lunch, instead of a tulipe canteen sandwich or nipping out for a decent coffee in the afternoon.

I did 6 months away the start of this year - that's probably the best part of £700 in lunches and coffee. Why would I choose to draw that as a dividend and have it counted as income when I can use it to reduce my c/t bill and not be counted as part of my personal taxation?

I'm permie at the minute where I don't have a choice - that's fine. I'm also sat at home with **** all to do and somebody keeps paying me - swings and roundabouts.

[Willapp]

So basically there's no general consensus on claiming lunch expenses? It's an interesting subject and I know some say it's a trivial thing to worry about as we're only talking 20% of a small amount, but I agree all these things add up and if it's a legitimate thing to claim for then why wouldn't you?

Personally I've never claimed as I haven't seen any clear guidance on the criteria for when it's okay and when it isn't. Another contractor on site here claims the full £5 (without receipts afaik) and his argument is based on him being "away from home" for more than 9 hours a day when he factors in the commute/drive to client site. I don't know what he's basing this on though.

Any accountants care to give their opinion on when it's okay to claim lunch costs and when it isn't? I understand that claims should be receipted and based on incurred cost - I don't agree with the idea of claiming a flat £5 per day that doesn't make sense to me.

[Snarf]

So basically there's no general consensus on claiming lunch expenses? It's an interesting subject and I know some say it's a trivial thing to worry about as we're only talking 20% of a small amount, but I agree all these things add up and if it's a legitimate thing to claim for then why wouldn't you?

Personally I've never claimed as I haven't seen any clear guidance on the criteria for when it's okay and when it isn't. Another contractor on site here claims the full £5 (without receipts afaik) and his argument is based on him being "away from home" for more than 9 hours a day when he factors in the commute/drive to client site. I don't know what he's basing this on though.

Any accountants care to give their opinion on when it's okay to claim lunch costs and when it isn't? I understand that claims should be receipted and based on incurred cost - I don't agree with the idea of claiming a flat £5 per day that doesn't make sense to me.

You don't need opinion from people on a forum : http://www.hmrc.gov.uk/manuals/bimmanual/bim37675.htm

[Willapp]

So quoting from the HMRC page linked above:

Caillebotte v Quinn [1975] 50 TC 222 (see BIM37660) is the authority for disallowing the cost of a subcontractor's lunches where there is a regular work pattern involving travel to different sites within a narrow radius of the subcontractor's home.

Where such costs are not deductible there can be no apportionment of the expenditure to allow the additional expense of lunching away from home. The treatment outlined above applies even though the ‘business base' is at the home address.

Why are we even debating this when the rules sound pretty clear that if the journey is regular and within a reasonable distance from home, it's not permitted to claim lunch expenses? As I said before it's not something I've claimed for on the assumption it probably wasn't allowed, and now this is confirmed then I definitely wouldn't consider doing it.

Do those claiming lunch not feel that the above rules apply to them?

[PerfectStorm]

Maybe the industry (inc Hmrc, accountants and the like) sees 24 month rule as more relevant these days than that case from 1975

[TheCyclingProgrammer]

Do those claiming lunch not feel that the above rules apply to them?

Correct, the rules quoted do not apply to employees (or directors). The apply to the self-employed. As a general rule, the BIM (Business Information Manual) applies to expenses for either sole traders or an incorporated business. They do not apply to employees. The correct manual is the EIM (Employers Information Manual).

The rules for subsistence associated with business travel are here:
EIM31815 - Travel expenses: general: accommodation and subsistence: include associated subsistence

Following the decision in Nolder v Walters (15TC380) ‘travel expenses’ for this purpose include the actual costs of travel together with any subsistence expenditure and other associated costs that are incurred in making the journey. This includes:

any necessary subsistence costs incurred in the course of the journey
the cost of meals necessarily purchased whilst an employee is at a temporary workplace
the cost of the accommodation and any necessary meals where an overnight stay is needed. This will be the case even where the employee stays away for some time

So clearly, meals (including lunch) purchased in the course of a business journey or while working at a temporary workplace are claimable. There isn't really much to debate over this. If you are working at a temporary location and the travel is claimable (i.e. not caught by the 24 month rule), then so is any associated subsistence.

By the way, the "full £5" you've mentioned a few times doesn't generally apply unless you have a dispensation to use scale rates. This is unlikely to be the case if you're a Ltd Co contractor as they don't hand them out to just anybody. Umbrellas are more likely to use them as it saves them admin in processing expenses, but you still need to keep evidence that you incurred costs.

If you work in central London its very likely your lunch costs more than this anyway (I tend to average about £10-12 a day on lunch). I have a reporting dispensation which saves the faff of submitting a P11D each year.

Whether you choose to claim lunches, or coffees etc. is up to you. There's obviously an admin overhead to collecting receipts and filing them away and some may say its not worth it. Personally I claim for lunch but never both claiming for things like coffee or even a snack bought on the way to the office if I skipped breakfast but only because I can't be bothered keeping all the receipts.