Allowable expenses correctly recorded


Each month our LLP holds a members meeting (at various venues) to discuss the business with lunch provided for the attending members. Should I be recording this lunch expense as ‘subsistence’, ‘staff refreshments / welfare’ or ‘misc office costs’?

Hi @Bluesden

This topic may be able to point you in the right direction: What nominal account would interview food come under?

It might also be worth speaking to your accountant and getting their input on this.

I hope this helps, but if you have any further questions, please don’t hesitate to ask.

If everyone at the meeting is a partner, then this would be business entertaining, which is disallowable for tax. Nor can you reclaim input VAT on business entertaining. If there are also employees present, their cost would be staff entertaining, which is allowable.
Subsistence is meals provided for employees while working away from their usual place of work.

Here is the link to HMRC’s guidance on entertaining

Cool. Thank you very much!

@cbstephensaca Thank you for the link. I just followed it and my interpretation is that the expense does seem to be allowable as the partners of the LLP are classed as employees:

The relevant points seem to be:

2.1 Definition of ‘business entertainment’
Entertainment is ‘business entertainment’ when all of the following conditions are met:

  • entertainment is provided - see paragraph 2.2
  • it’s provided to persons who are not employees of your business - see paragraphs 2.3 to 2.4 and 3.3
  • it’s provided free

2.3 Employees that are included for the purpose of business entertainment

An employee includes:

  • a person employed by you
  • directors - or anyone engaged in the management of the business (including partners)
  • self employed persons (subsistence expenses only) - treated by you in the same way for subsistence purposes as an employee
  • helpers, stewards and other people essential to the running of sporting or similar events

My reading of these conditions and definitions is that member partners in an LLP are classed as employees and entitled to a ‘free lunch’. I know it doesn’t happen often! :slight_smile:

I think having it recorded under ‘Refreshments / Staff welfare’ seems the best fit.

However, if you continue reading, section 3.2 deals specifically with directors or partners when they are the only ones being provided with entertainment. It is definitely disallowable if it is only partners in attendance.