Ask an UK Tax Question, Get an Answer ASAP!
Thanks for your question
Not normal working lunches no, as we all have to eat to live , and the fact that the employees work through their lunch has no bearing on any additional expense that the company has had to bear.
However if there is a business meeting, and the employer provides that lunch then it matters not whether clients are present or its just staff attending a business meeting, so this would be allowable, as this is then deemed to be a business cost first and foremost, and it does not matter where that meeting takes place.
Hi Sam, just a further query. I just want to clarify on the VAT element of the business working lunch.The fact that there is provision of food and drink - will VAT notice 700/65 come into effect? So the VAT & Tax rules are effectively different. My understanding - VAT is allowable for the 'ees and overseas visitors only and not UK visitors to the meeting. So costs for VAT purposes would have to be apportioned accordingly. Please may I have your view on this. Thanks, CAS
Thanks for your response
I can see your stance on this and although this arguably does fall with business expenses rather than business entertainment. I tend to apportion the cost to represent the employees as allowable for VAT purposes, as HMRC (both VAT and Tax) do then have a habit of treating this as business entertainment.
SO I would agree with you and adhere to VAT notice 700/65
Hi Sam, I think it's a case of being pragmatic & sensible.
Having attended a Board meeting working lunch - there is so much waste or over-purchase of sandwiches anyway! I'm sure the legislation is to stop abuse of fancy meals out - my client wanted to know what the situation is. I'm sure there is some case law (I can't remember what it is) regarding work- meeting lunches- but surely materiality also has to come into it too? CAS
Thanks for your question.
At the top of my hat I can only find case law relating to annual conferences and a sole trader, within the Business Income manual -
I am about to meet with clients but will have a trawl through the Employment income manual (for staff) and further within the Business Income manual for clients on my return