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Business Meeting Expenses Tax Treatment

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Hi Everyone

Had a search and there's so much conflicting info on this online, so wondered if someone could help.

Directors and management staff having meetings at the local cafe / meeting rooms / hotel lobbies etc to discuss up-coming projects and planning - all business related discussion.

If expenses are incurred such as teas, coffees, food etc -  hundred pounds or so between group of say 4-7 each time.

How would you treat this for tax purposes?

Replies (18)

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By Truthsayer
01st Nov 2021 12:18

If only employees are present, and the fare is modest, I treat it as deductible and not a b-i-k. I have known HMRC ask about such expenditure on PAYE compliance visits, but they have not disputed the treatment.

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By Paul Crowley
01st Nov 2021 12:52

Allowable

If disputed it could even be Trivial benefit if total divided by number attending is less than £50 per head

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Replying to Paul Crowley:
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By Tax Dragon
01st Nov 2021 13:06

If it's a business meeting, the cost is being incurred (and the benefit provided) for (attendance at) that meeting. It therefore falls foul of Condition D in s323A. (The abuse of the trivial benefits rules that accountants are guilty of is appalling, IMHO. Lucky the amounts are trivial, I guess.)

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Replying to Tax Dragon:
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By Paul Crowley
01st Nov 2021 14:03

I respectfully disagree
Condition D is to stop giving "rewards" instead of paying overtime for something extra that employees did. Ie extra services
The employees did nothing extra, just worked somewhere else

The meal or refreshments are not a reward for attandance, they are there because the employees are taken out of their usual environment.
Cannot take flask and packed lunch to the coffee bar

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Replying to Paul Crowley:
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By gillybean04
01st Nov 2021 14:53

Where does condition D say anything about having to be "extra"?

Are you perhaps thinking of condition C which states the benefit is not provided for any contractual obligation?

Condition D is that it can't be given in recognition of any particular service or in anticipation of such service (so they'd get the same benefit whether they attended or not).

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Replying to gillybean04:
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By Paul Crowley
01st Nov 2021 15:10

It uses the word particular
Something singled out
That to me means something specific, possibly special.
If employee, within normal hours, does something deserving of particular benefit then trivial benefits do not apply
Attending a meeting I would not consider particular
but an office worker getting out and sorting the weeds, in normal hours, is particular.
Any reward for this extra, or particular activity falls foul of Condition D

But noone will really know the rules until precedent set
And I do not expect one in my working lifetime

Either party taking such matters to tribunal needs to rethink their life

Any other ideas what D is meant to mean?
This is not canteen, so no need to be available to all

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Replying to Paul Crowley:
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By gillybean04
01st Nov 2021 16:22

To be clear, I'm not saying I think it has to be available to all. Just that it cannot be conditional upon the employee performing a particular service (such as attending a meeting to brainstorm, hitting a target, staying late to reach a deadline etc).

Agree with the latter part about picking your battles. But I'm always looking to learn/improve so like reading and querying, even on the trivial (pun?) matters.

As for what it might (just might, since I'm in no way authorative on the matter) mean, as I said to TD, without the inclusion of the word particular, it could then be a catch all for any benefit provided to an employee. Such as flowers on their birthday or a hamper for new parents.

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Replying to Paul Crowley:
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By Tax Dragon
01st Nov 2021 14:41

I applaud you for defending your view, but if you're going to reach for and rely on a purposive interpretation of the trivial benefits rule, I reckon you'll struggle. Especially if you think the purpose is somehow captured by the word "extra"; there is no sense of the "extra" in s323A. (I do confess I've never really understood the use of "particular" in Condition D, but whatever it does mean I don't think it conveys "extra". And attendance at the lunch is "particular", so my lack of understanding doesn't need to get exposed here.)

Whilst I don't wholly agree with HMRC ("Typically, trivial benefits include benefits provided solely for staff welfare purposes such as a bunch of flowers on the birth of a child or a bereavement. Benefits provided in recognition of services provided such as long service awards and social events as a team-building event or as a thank-you for good results in the year will not qualify as trivial benefits. However, another exemption might apply in particular circumstances." - EIM21868), I do agree on this particular aspect.

BTW, don't forget Condition C.

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Replying to Tax Dragon:
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By gillybean04
01st Nov 2021 14:53

I actually wondered the same thing about particular. However, I suppose without that word that any benefit provided would fail to satisfy condition D as every benefit provided to an employee is in recognition of their service (unless the company is giving it to non-employees also).

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By Paul Crowley
01st Nov 2021 14:19

In none of firms I have worked for, have meeting expenses ever been treated as benefits
I am of course speaking about proper meetings not jollies abroad with wives on a "conference"
Not aware of any being challenged

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Replying to Paul Crowley:
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By Tax Dragon
01st Nov 2021 14:52

Yeah, and all of that would have been before trivial benefits legislation came in.... my only point above is that the trivial benefits exemption is not in point, it is not remotely in point, it shouldn't even be part of this discussion. (And that the rule is misapplied and abused in thread after thread in this forum.)

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Replying to Tax Dragon:
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By Tax Dragon
01st Nov 2021 15:28

Tax Dragon wrote:

it shouldn't even be part of this discussion.

The inevitable irony being that it is now the sole focus of the discussion. Anyway, I'm out - I've nothing further of use to add.

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By Hugo Fair
01st Nov 2021 15:03

In practice, most people I suspect would treat it as allowable.

However, my main concern would be the average cost/employee being seen (by HMRC) as not 'necessary'. "hundred pounds or so between group of say 4-7 each time" means an average of £15-£25+ per person for "teas, coffees, food etc" ... which sounds like rather more than basic victuals (unless these meetings are held at the Ritz)?

With regard to the suggestions for treating these as Trivial Benefits, I'm with TD in saying that it would be disallowed. If you prefer EIMs to Statute, then check out https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21868 ... Example H:
"Employer H requires its employees to work through their lunch hour and provides them with lunch. The meal has been provided because of the work they are undertaking. The benefit does not satisfy the requirement that it is not provided in recognition of particular services performed by the employee and so the exemption does not apply."

There is also the more general caveat regarding frequency of occurrence:
"The vast majority of employers will only provide their employees with benefits that are not linked to particular services on an irregular or infrequent basis. There is a cost to the employer of providing such benefits and the employer will want to be careful in managing its employment costs. Therefore, if an employer provides their employees with benefits on a regular or frequent basis you should consider whether they are linked to the employee’s services".

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Replying to Hugo Fair:
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By Paul Crowley
01st Nov 2021 15:18

Example H is payment for working through lunch hour.
They did a particular thing and got a particular benefit, probably informed of benefit before they did it

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Replying to Paul Crowley:
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By Tax Dragon
01st Nov 2021 15:18

Hence "extra"? Read on: example I is for people doing their job.

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Replying to Hugo Fair:
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By DJKL
01st Nov 2021 16:10

Obviously afternoon tea at the Caledonian Hotel at that price per head , well actually that would be nearer £45 (having taken wife there a couple of times) - I used to do a lot of my client meetings in the Caledonian (not having an office) but tended to restrict myself to coffee and a bun.

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By Matrix
01st Nov 2021 16:13

If they are all employees and by local you mean down the road from the office then I would treat as staff entertaining. You can get a PAYE settlement agreement I believe.

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By AndyC555
02nd Nov 2021 09:10

I'd have thought the starting point was s317 ITEPA 2003.

What's being described doesn't seem to meet the criteria.

After that we're looking at whether the subsistence being provided falls with s337 to s339 as subsistence associated with business travel. The question mentions that it's a local café (etc).

I've seen clients claim that lunches at a local restaurant were business lunches because business was discussed at the meeting. I don't think HMRC share the view.

See Example 3 at EIM 21673

"A small company has three directors and two employees. Twice a week they all have a working lunch together in the office at which they brainstorm new ideas. The lunch is on a reasonable scale and paid for by the company. Every second Friday they go to the pub at lunchtime to discuss over a pub meal how the business is developing. The meals and drinks are paid for with a company cheque.

Section 317 applies to the working lunches in the office because all the employees may get a free meal on the employer’s premises. But Section 317 does not apply to the pub meals. They are not on the employer’s premises or in a canteen where meals are provided for staff generally."

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