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VAT on food and drink for home based business

Dear all,

I am new to this forum. A friend of mine runs a limited company which is registered at his home. The company is VAT registered.

His permanent office is at home but he usually conducts business meetings outside his permanent office (home). In most cases, he goes out to cafes to meet suppliers and other colleagues/business associates (all home-based) where he ususally incurs costs on meals/coffee incidentally in the form of working breakfast/working lunches. The cafes are mostly far from his home/permanent office. 

He would like to know if the expenses as such will be classified as 'entertainment' and if they are allowable expenses from business tax perspective, and also whether the input VAT of these expenses can be claimed?

Many thanks,

JCHH

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09th Jan 2019 18:08

Sounds like entertainment to me.

I'd go with a cup of coffee, maybe even a biscuit - or Jaffa Cake - but a full meal seems beyond common politeness.

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By Matrix
09th Jan 2019 18:18

If he just pays for his own then I would treat as travel and subsistence. If he entertains clients then it is business entertainment, so no tax deduction and no VAT reclaim.

I would expect it is the latter.

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By DJKL
09th Jan 2019 20:14

How far is far?

If he eats at one of these how many hours after that could he be back home, or how many hours after leaving home does he arrive at the place he eats?

When I used to do more business meetings at The Balmoral in Edinburgh I would consider the tea/coffee cost fair game but not the sandwiches or soup, it is circa 35-40 minutes from house and in same city, whereas when I did meetings at The Dakota at South Queensferry I tended to feel more justified with both coffee and say a scone, notwithstanding on a good day I can drive it in under 35 minutes from the house, but it is not Edinburgh, it is outside Edinburgh, subsistence felt more justified.

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to DJKL
10th Jan 2019 14:38

South Queensferry has been part of Edinburgh for far longer than the Dakota has been in existence.

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to DJKL
11th Jan 2019 10:15

Thanks. usually the journey will take between 45-60 minutes one way between his home office to the cafe he had business meetings.

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to DJKL
11th Jan 2019 10:15

Thanks. usually the journey will take between 45-60 minutes one way between his home office to the cafe he had business meetings.

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09th Jan 2019 20:15

Perhaps your friend would like to register with this forum. It might make communication easier.

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