Lunch expenses

[Lance]

I don't keep any receipts for my lunch/ subsistence. I work away, so claim this every day.

I opened a Tide account and lobbed some money into it. I use this account to pay for every meal, drink, sandwich that I purchase as an expense. I only use it for this. The statements clearly shows where, when and how much. This is far better for HMRC than any faded receipt in a drawer and less hassle than even photo copying or scanning receipt and attaching to my Freeagent accounts.

The only receipts I have to keep are those that I have to pay cash for - eg. taxi.

Unless you want to claim VAT.
Or claim a free £5 a day as incidental expenses (receipted).

[TheCyclingProgrammer]

I don't keep any receipts for my lunch/ subsistence. I work away, so claim this every day.

I opened a Tide account and lobbed some money into it. I use this account to pay for every meal, drink, sandwich that I purchase as an expense. I only use it for this. The statements clearly shows where, when and how much. This is far better for HMRC than any faded receipt in a drawer and less hassle than even photo copying or scanning receipt and attaching to my Freeagent accounts.

The only receipts I have to keep are those that I have to pay cash for - eg. taxi.

You probably ought to keep your receipts.

Whilst travel and subsistence expenses reimbursed by YourCo are covered by an exemption (meaning they don't need to be reported on your P11D or your tax return), one of the conditions of being able to make use of these exemptions is that you can demonstrate having a proper system in place to verify and track that the expenses incurred:

Your employees aren’t allowed to check their own expenses, so someone else within your company needs to do this to make sure they’re legitimate.

Tell your employees to keep proof of their expenses, for example receipts or bills, in case you need to check them.

https://www.gov.uk/employer-reportin.../dispensations

The easiest way of doing this is by keeping a log along with evidence of each transaction (e.g. the receipt).

A larger company might get away without having to check receipts for every employee they pay expenses to but as a one-person business without anyone else internally auditing your expense payments keeping the receipts is the easiest way to demonstrate to HMRC that your expense payments are legitimate.

Even before exemptions were introduced, the payments would either a) be covered by a dispensation which needed to be applied for and required a similar means of record keeping and checking as exemptions or b) would be reported on your P11D and tax return requiring you to personally keep the receipts in case you had a tax return enquiry.

Further guidance is outlined here; a systematic failure to retain evidence of expenses incurred under the exemptions regime could lead to HMRC revoking the right to use exemptions:

https://www.gov.uk/hmrc-internal-man...anual/eim30270

[Spikeh]

Interesting. I've always claimed lunch expenses when on-site - not at home, obviously. Accountant advised its fine as long as I don't take the mick. I keep all receipts - sometimes my PA logs them in a granular fashion, other times she logs them in bulk. It doesn't matter as long as there's a record.

Question is - is lunch "Wholly and exclusively for business"? Would I be able to perform my services without lunch? Yes... but there has to be a level of humanism here - I don't have the time or resources to prep lunch whilst on a client's site, and the repercussions there is that lunch generally costs me a LOT more when I'm on site.

[TheCyclingProgrammer]

Question is - is lunch "Wholly and exclusively for business"?

That's not the relevant question. The above question is the "general rule" for business expenses. Lunch taken while on business travel or travelling to a temporary workplace is covered by a more specific rule. HMRC have essentially already taken the view that any subsistence taken whilst travelling for business (or at a temporary workplace) is taken "necessarily" in the course of doing your job.

[JRCT]

[QUOTE=TheCyclingProgrammer;2533538]
..demonstrate having a proper system in place to verify and track that the expenses incurred:



The easiest way of doing this is by keeping a log along with evidence of each transaction (e.g. the receipt).

[QUOTE]

I disagree. Keeping the receipt is only one way of doing this. All the relevant information that is on a receipt is on my bank statement. Proof of purchase, date, establishment, amount etc. In many cases (small cafes) it actually holds more information than the receipt does.

It's also easier, less time consuming and more accurate.

[Lance]

[QUOTE=JRCT;2533544][QUOTE=TheCyclingProgrammer;2533538]
..demonstrate having a proper system in place to verify and track that the expenses incurred:



The easiest way of doing this is by keeping a log along with evidence of each transaction (e.g. the receipt).

I disagree. Keeping the receipt is only one way of doing this. All the relevant information that is on a receipt is on my bank statement. Proof of purchase, date, establishment, amount etc. In many cases (small cafes) it actually holds more information than the receipt does.

It's also easier, less time consuming and more accurate.

If that's more accurate you're a really tulipty bookkeeper IMO

do you reclaim VAT on those expenses?

[JRCT]

[QUOTE=Lance;2533549][QUOTE=JRCT;2533544]

..demonstrate having a proper system in place to verify and track that the expenses incurred:



The easiest way of doing this is by keeping a log along with evidence of each transaction (e.g. the receipt).



If that's more accurate you're a really tulipty bookkeeper IMO

do you reclaim VAT on those expenses?

No. I'm on FRS.

I can understand why someone might want the safety and reassurance of keeping receipts. But any process that involves transferring information from bits of paper is absolutely going to be less accurate than an automated process with no manual intervention.

There are two points there, but the second one is definitely correct and any bookkeeper of any make or model will agree with that 100%. You can argue the toss about receipts from an HMRC pov if you like.

[vwdan]

[QUOTE=JRCT;2533552][QUOTE=Lance;2533549]

No. I'm on FRS.

I can understand why someone might want the safety and reassurance of keeping receipts. But any process that involves transferring information from bits of paper is absolutely going to be less accurate than an automated process with no manual intervention.

There are two points there, but the second one is definitely correct and any bookkeeper of any make or model will agree with that 100%. You can argue the toss about receipts from an HMRC pov if you like.

Surely the answer is to do both and reconcile the receipts against your listed transactions.

Incidentally, this is precisely what I do - I use a Company Credit Card for all day to day expenses. I then go through them line by line, import receipts and claim for VAT where appropriate. If I've lost a receipt or couldn't get one then I make a judgement call. If the transaction description is a bit vague, I'll just put it from the Directors Loan account to save any hassle