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Coffee

A client of mine is a small (three person) advertising agency.

They have an office in the town centre above a small coffee shop. (Not a high street name though)

During the day the three directors who own the company use office tea and coffe bought from waitrose but occasionally, three/four times a week, send down for a Latte/Cappuccino instead, and when they have clients visiting, they order in the nice coffees and they would also occasionally buy in sandwiches for such meetings.

My question is, should this (discounted as the owner gives them 25% off) cost be a benefit for the individuals. My thought is not as the fact the company buys slightly more expensive refreshments occasionally (at £1.50/cup as opposed to the 10p it costs from a jar) is of no bearing to my mind.

I have reviewed HMRC guidance at EIM21863 and EIM21671 and feel there is no charge arising but would (for peace of mind) appreciate a second opinion. 

Thankyou

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I agree. It doesn't matter...

...where the coffee comes from or how much it costs.  If it's provided on the employer's premises and is available to all (not necessarily the same quality to all, nor on the same terms to all), then the exemption for workplace canteens and the like (which I assume is what your references relate to) will apply.

If they take clients downstairs and have coffee in the coffee shop then their coffee will be a W,E&N expense (negating any benefit) if their coffee is incidental to the entertaining of the clients.

If they go down stairs without clients for coffee they'll have a benefit.

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10th Oct 2012 12:37

i agree with the inestimable Mr Kesby

keep up the excellent work Steve

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10th Oct 2012 12:48

Mr Kesby is good isn't he? I second Carnmores.

SA

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10th Oct 2012 12:51

hmmm

Firstly agree with Steve (as always)

Secondly, if food is provided in the workplace and is available to all, does that mean if I order a takeaway Pizza to the office for all staff to enjoy (and there is only one staff member....!) the benefit is negated

Just a thought as I am a tad peckish.... !

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10th Oct 2012 12:59

informative and succint not sure about his tie !

is negated and eaten - i had a pizza last night first one for a while - i think the first pizza express opened on corner of limerston st  / fulham road in london around about 1968 , i loved it then love it now...

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What's wrong with my tie?

I'd say that Ding Dong would get away with his pizza.  I'm impressed that Carnmores has first hand knowledge of Balloon Promotions too.

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By Old Greying Accountant
10th Oct 2012 19:48

So...

... if a owner/director of a limited company, who is the sole employeee, buys a takeaway on his way home from a long day seeing customers, and eats it at his workplace, the registered office of the company, which happens to be his home, it is tax deductible for the company and not a benefit on him?  

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10th Oct 2012 19:43

@ OGA

That is how I too am reading Steve's post, I am working at home tonight and didn't get a Pizza at lunchtime - but might fancy one tonight now reading that - and yes I am genuinely working, here in the office so couple what Steve has said with the fact I am working late and it is not a regular occurrance I reckon I may just add a Garlic Bread !

Steve - are we interpretting your response correctly? - I have no desire to abuse this possibility but it would almost seem to good to be true!

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Well take a look at HMRC's guidance...

... if it's on the "employer's premises", you can even provide yourself with a glass of wine to go with your otherwise modest pizza. See EIM21670 onwards.

The problem you might have with having it at home is whether that's really the "employer's premises".

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By Old Greying Accountant
10th Oct 2012 21:18

Presumably ...

Steve Kesby wrote:

... if it's on the "employer's premises", you can even provide yourself with a glass of wine to go with your otherwise modest pizza. See EIM21670 onwards.

The problem you might have with having it at home is whether that's really the "employer's premises".

... if you have a formal licence agreement and the company pays rent for the use of the premises (as per best practice advice), providing the meal is consumed in the space rented it will necessarily be on the employer's premises?

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By lisler
10th Oct 2012 20:55

Not straight forward is it.

A client sells training. On full day courses a lunchtime break is taken at a local pub. The costs are usually a reasonable £5-£10 per person.

I have treated these costs as disallowable business entertaining as opposed to the tea and coffee provided, with biscuits, in the morning and afternoon breaks which I treat as an allowable business expense.

Am I correct or is it possible to treat the lunches as an allowable business expense?

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@ lisler

I think you need to read BIM45013.

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I'd argue that that was the case...

... but it would be a brave man to try it on too regular a basis.

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11th Oct 2012 13:06

Fascinating , im off to Majestic !

re Baloon Steve , i was harking back to the pre franchise and pre Johnson / Osmond / Page days @PE , some time shortly after the great war as i remember

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