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Employee lunches - allowable CT expense?

Small company wanting to help staff retention

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Hi all,

I'm getting in a muddle over this one.  So small company has taken on a couple of new staff so wants to create a nicer office environment.  They are planning on doing things like ordering in lunches for employees once a week (they can't all go out for a meal together as the phones need to be manned at all times), buying food treats for everyone to share, having a communal fruit bowl for everyone, coffee machine, that kind of thing.

I had assumed these would be allowable expenses from a Corporation Tax point-of-view but was doing some research to check whether any benefits-in-kind would arise.  My conclusion was that there will be no BIK as they would be 'trivial benefits' or the lunches would fall under these rules: https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21671 as they would be provided in the office.

However, some of the links that came up suggested the lunches would not be tax deductible, e.g. this one https://www.thefriendlyaccountants.co.uk/tax-treatment-of-lunches-provid... now I am thrown.

Can anyone point me in the direction of a clear answer on this?

Thanks.

Replies (18)

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By David Ex
24th May 2022 17:23

Sinny wrote:

Can anyone point me in the direction of a clear answer on this?

I'd go with HMRC guidance over that other link which, at best, is clumsily drafted.

I have no direct experience but would be wary of relying on trivial benefits exemption because of the various conditions hat have to be satisfied.

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Replying to David Ex:
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By Sinny
25th May 2022 14:50

I found plenty of guidance from HMRC on the benefit-in-kind rules but I'm struggling to find anything about whether items are allowed to be deducted for Corporation Tax.

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By DKB-Sheffield
24th May 2022 17:24

That 'link' is bringing up a 404 error for me.

Has the page now been taken down?

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Replying to DKB-Sheffield:
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By gillybean04
24th May 2022 17:27

No. Right click, copy link address, paste into browser and remove the last half a dozen characters or so after the last /

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By Hugo Fair
24th May 2022 21:38

Well at least now we know the culture from which Boris gets his bank of excuses ... see your EIM link which includes "The provision of a glass of wine with an otherwise modest meal is not unreasonable".
It (drinking alcohol on the work premises) would get you fired in many offices!

Note to OP: the exemption referred to in the EIM has nothing to do with Trivial Benefits (which have their own specific rules).

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Replying to Hugo Fair:
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By Sinny
25th May 2022 14:47

Yes, sorry I was unclear, I think the items they are thinking of providing would fall under either the Trivial Benefits rules or the ones in the EIM.
Also agree that drinking alcohol at work is a big no in most places!

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Replying to Hugo Fair:
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By DKB-Sheffield
25th May 2022 16:02

Dear Sue,

Until recently I worked for a man who lives in a big house. Every week we would have "Wine Fridays". The 'big boss' would often pop in and have photos taken, but we weren't meant to tell anyone he was there (perhaps his wife didn't know). It often got messy, we all got tiddly, and on one occassion the police came because someone pressed a panic alarm. Some of us would even end up having a spiffing sleepover. On Saturday it was often a complete tip... overflowing bins, sick on the walls etc. Luckily, we had cleaners! It was all super great fun at the time!

Not sure if it qualified as a 'canteen' but, my boss did used to give us some cheese? We would sometimes bring our own wine too (in suitcases).

Regards,
AS

OOPS... wrong forum!!!

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Replying to DKB-Sheffield:
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By More unearned luck
26th May 2022 19:46

The thing I learned from partygate was what WTF stood for.

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Replying to More unearned luck:
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By DKB-Sheffield
26th May 2022 20:28

And used in both contexts no less!

"Well done for your hard work this week... time for WTF"

"The nation's in lockdown and can't meet their loved ones... WTF"

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Replying to DKB-Sheffield:
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By Hugo Fair
26th May 2022 21:05

And there was me assuming that only the 2nd of your examples was ever in use ... the former (and now publicised) meaning being merely a post-hoc invention to protect the sensitive (a bit like the claim that SNAFU contains the word 'fouled')!

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By Michael Beaver
25th May 2022 09:22

We have always gone by the rules that if it is provided in the office, not excessive, and available to all staff it's treated like a canteen. Deductible for CT and not a BIK.

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Replying to michaelbeaver:
Routemaster image
By tom123
25th May 2022 09:34

Likewise for me.

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Replying to michaelbeaver:
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By Catherine Newman
25th May 2022 11:12

That was my automatic thought.

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Replying to michaelbeaver:
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By Sinny
25th May 2022 14:45

This was my thinking too, thanks for the confirmation.

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Replying to Sinny:
Pile of Stones
By Beach Accountancy
26th May 2022 11:30

Definitely make sure it available for all staff though (I'm not enough of an HR expert to advise re vegetarians, vegans, Ramadan, etc...)

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By Paul Crowley
25th May 2022 21:17

We used to do Pizzas on a friday lunchtime.
Covid stopped all that

I considered it was canteen and it was provided for all in the building
Did not even consider a challenge would be worth the effort for HMRC given that trivial benefit was available as a backdrop

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By Tax Dragon
26th May 2022 09:19

Re your question, see s1299(3) CTA 2009 (HMRC analysis: BIM45033).

Re everyone's response... canteen isn't a necessity. Read s317 ITEPA 2003 if you want to know the actual rules.

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Replying to Tax Dragon:
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By creamdelacream
26th May 2022 18:42

Mic drop

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