High Clarity Accountants

TAX TIP OF THE WEEK – Can i get tax relief on customer meals?


Often, as business owners we will pay for meals or drinks on behalf of our customers to create new or cement existing customer relationships, so we see this as a necessary expense for the business.

Unfortunately, HMRC class these costs as entertainment and therefore do not allow a deduction against income tax or VAT.

A partial way around this is based on the fact that although entertainment isn’t allowed, subsistence costs are. As these are only limited to company employees what you could do is ask the restaurant to issue 2 separate bills, at least your part of the cost will be able to get full tax and vat relief.

Although the customer share of the cost is still not deductible for company tax, you will still save on the personal tax element as long as the meeting was for business purposes.

For more tax strategies download our 71 ways to save tax checklist https://bit.ly/2YQbhvr