HMRC internal manual

Business Income Manual

BIM47705 - Specific deductions - travel and subsistence: expenditure on meals and accommodation

S57A Income Tax (Trading and Other Income) Act 2005

This guidance applies for Income Tax only.

General rule

The cost of food and drink consumed, and accommodation used, by a trader is not in general an expense incurred wholly and exclusively for the purposes of the trade, since everyone must eat in order to live. Such costs are (either wholly or partly) normal costs of living incurred by all and not for the purposes of trading, see BIM37900 onwards.

Where such costs are disallowable they cannot be apportioned to allow extra costs incurred from the necessity of lunching away from home or the place of business. There is no identifiable part or proportion of the expense which is incurred wholly and exclusively for trade purposes.

Occasional journeys outside the normal pattern and itinerant trades

A deduction is, however, allowable for reasonable expenses on food and drink for consumption by the trader either at a place to which the trader travels in the course of the trade or while travelling in the course of the trade, if certain conditions are satisfied.

A deduction must be allowable for the cost of travelling to the place, or would be if the trader incurred any such costs, and either:

  • the trade is an itinerant trade at the time the expenses are incurred; or

  • the trader does not travel to the place more than occasionally in the course of the trade and either:

    • the travel concerned is not part of the trader’s normal pattern of travel in the course of the trade; or
    • the trader does not have such a normal pattern of travel.

Overnight subsistence and accommodation expenses

Where a business trip by a trader necessitates one or more nights away from home, the hotel accommodation and reasonable costs of overnight subsistence are deductible.

This does not extend to overnight accommodation and subsistence at the base of trade operations, even if there is a contractual requirement for the trader to reside in a particular place.

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

The same treatment may be extended to traders who do not use hotels, for example, self-employed long distance lorry drivers who spend the night in their cabs rather than take overnight accommodation.

For more detail, see BIM37670.