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HMRC internal manual

Business Income Manual

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HM Revenue & Customs
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Wholly and exclusively: duality of, or non-trade, purpose: non-travel topics: accommodation and subsistence: 'itinerant' trades

S34 and S57A Income Tax (Trading and Other Income) Act 2005, S54 Corporation Tax Act 2009

What to do in practice

The cost of meals taken away from the place of business is not, in general, an expense incurred wholly and exclusively for business purposes, since everyone must eat in order to live. This follows from Caillebotte v Quinn [1975] 50 TC 222 (see BIM37660) and Watkis v Ashford, Sparkes and Harward [1985] 58 TC 468 (see BIM37925). Where such costs are disallowable they cannot be apportioned to allow extra costs incurred from the necessity of eating and drinking away from home or the place of business.

Itinerant trade journeys outside the normal pattern

But extra costs may be incurred wholly for business purposes where a business is by its nature itinerant (eg in the case of commercial travellers), or where occasional business journeys outside the normal pattern are made. You may allow a deduction for reasonable expenses incurred in these circumstances. See BIM47705 for further details.

Overnight accommodation and subsistence

Where a business trip necessitates one or more nights away from home, the hotel accommodation and reasonable costs of overnight subsistence are deductible. See Edwards v Warmsley Henshall and Co [1967] 44 TC 431 (see BIM37615) and Watkis v Ashford, Sparkes and Harward [1985] 58 TC 468 (see BIM37925).

This does not extend to overnight accommodation and subsistence at the base of business operations, even if there is a contractual requirement for the trader to reside in a particular place. See Mason v Tyson [1980] 53 TC 333 (see BIM37928), Prior v Saunders [1993] 66 TC 210 (see BIM37665), Mclaren v Mumford [1996] 69 TC 173 (see BIM37930) and BIM66210.

The reasonable costs of meals taken in conjunction with overnight accommodation are allowable, whether or not paid on the same bill.

Long distance lorry drivers subsistence

Long distance self-employed lorry drivers are able to claim a deduction for the reasonable cost of meals taken in conjunction with overnight accommodation in accordance with Edwards v Warmsley Henshall and Co and Watkis v Ashford, Sparkes and Harward.

The same treatment can be extended to self-employed long distance lorry drivers who spend the night in their cabs rather than take overnight accommodation.

It should be emphasised that it is only ‘reasonable’ expenses which may be allowed and the expenses claimed must be supported by adequate contemporaneous records.