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Claiming GST on meals

A benefit of being self-employed has always been the ability to claim those in-between-meeting lunches and coffees. Well, that is all a thing of the past according to the latest update distributed by the Inland Revenue in July last year.


Inland Revenue have confirmed that these expenses are not deductible for self-employed taxpayers in all but very limited circumstances. The latest release comes off the back of the IRD clarifying the boundary between private and work related expenditure, and can be added to such updates as tax deductions on telecommunication costs, vehicle costs and home office costs.

The 37 page document states that food is a private or domestic expense due to this being a requirement for humans to sustain life, therefore meal costs for individual self-employed taxpayers are primarily considered non-deductible.

An important exception applies where the private element is incidental to a wider business purpose, for example when entertaining a client. (This would be classed as 50% non-deductible under the entertainment rules.) Or, when paying for meals whilst travelling overnight for work purposes.

The new rule of thumb here is to keep accurate records of the purpose of any food and drink related costs so that they can be correctly classified for tax purposes.


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