Food and Accommodation

It is a long established principle that the cost of meals taken at the place of business are not allowable expenses for tax purposes. In addition, expenses incurred on meals consumed away from the place of business are, in general, not wholly and exclusively laid out for the purposes of the trade or profession since everyone must eat in order to live. Where such costs are not allowable they may not be apportioned to allow extra costs incurred from the necessity of eating away from home or from the place of business.

Costs of meals may be incurred wholly and exclusively for business purposes where a business by its nature involves travelling (for example, in the case of self-employed long distance lorry drivers) or where occasional business journeys outside the normal pattern are made. A reasonable level of expenses incurred in these circumstances may be deducted from business profits.

Where a business trip necessitates one or more nights away from home, reasonable accommodation costs incurred while away from home may be deducted. The cost of meals taken in conjunction with overnight accommodation may also be deducted. Where self-employed long distance lorry drivers spend the night in their cabs rather than taking overnight accommodation, the costs incurred on their meals may be deducted.

It is important to note that only expenses actually incurred and for which receipts are available may be claimed. Receipts must be retained for production in the course of a Revenue audit of the business.

Principles
  • What is the purpose of the expense (whether stated or subconscious) and not just its effects. Humans eat to live, they do not eat to work2. Therefore expenditure incurred on food in the course of a trade or profession will nearly always have a duality of purpose in that the person has the ordinary physical human need of eating.
  • Where additional expenditure is incurred on food because the taxpayer must eat away from home, that expenditure still has a duality of purpose meaning it is not an allowable expense.
  • Hotel accommodation incurred on a business trip – where there is no personal motive in the trip – is an allowable deduction. Where a hotel bill for a business trip includes reasonable amounts for both overnight accommodation and food then these two amounts should not be disaggregated. If the accommodation is allowable then so too is the food.
  • Where a person is on a business trip and the flights would be deductible, but it is more cost efficient to stay an extra night and return on a flight the following day, rather than return immediately, then any incidental private element arising from that extra day does not stop the cost of the flights being deductible.

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