Issue: Whether food & accommodation expenses are tax deductible

While this case involves the issue of whether or not a deduction can be taken for client lunches which is now specifically disallowed by section 840 TCA 1997, it is instructive in arriving at the principles of deductibility

A firm of solicitors met with clients over lunch to discuss business. Fees were raised for this advice in the same manner as for advice given in the firm’s offices and the client was not charged for the lunch. If the firm had insisted that all meetings take place at their offices, certain clients would have been lost as that would not have been convenient to them.

Romer LJ held that:

if, in truth, the sole object is business promotion, the expenditure is not disqualified because the nature of the activity necessarily involves some other result, or the attainment or furtherance of some other objective, since the latter result or objective is necessarily inherent in the act.

He further noted that it would be absurd if the presence of an element of hospitality, in however small and subordinate a degree, was fatal to a claim.

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