Last updated: 14 October 2026
Is lunch at a hotel to discuss a business plan tax-deductible?
It depends on who’s at the lunch. If it’s just you on your own as a sole trader, a meal near your normal place of business isn’t deductible, as eating is a personal expense. If you take a client, potential investor or supplier, it’s business entertaining, which isn’t deductible for income tax or corporation tax, and you can’t reclaim the VAT. The main exception is entertaining your own employees, such as a working lunch with staff to discuss the plan, which is deductible, though it may be a taxable benefit unless incidental.
Who’s at the table?
| Attendees | Deductible? | VAT reclaimable? |
| Sole trader alone, near normal workplace | No | No |
| Sole trader on a business trip away from usual base | Yes, reasonable subsistence | Yes |
| Clients, prospects or investors | No (business entertaining) | No |
| Employees only, business meeting | Yes | Yes |
| Mix of employees and clients | Employee share only | Employee share only |
| Accountant or adviser you’re paying | No, still entertaining | No |
Entertaining employees
A working lunch with staff to plan the business is a staff cost. If the meal is modest and incidental to the meeting, HMRC generally doesn’t treat it as a benefit. A lavish lunch could be a taxable benefit. The annual party exemption of £150 per head is separate and doesn’t cover routine working lunches.
Directors of one-person companies
If you’re the only director and eat alone, the cost isn’t deductible. If you meet a potential investor, it’s entertaining. Hotel room hire for the meeting is deductible, but the meal isn’t.
Example
Hannah runs a marketing company. She meets a potential investor at a hotel for lunch costing £120 and hires a meeting room for £80. The room is deductible; the lunch isn’t. The following month, she takes her 4 staff for a working lunch at the same hotel to finalise the business plan, costing £160. That’s deductible for the company, and modest, so there’s no benefit for the staff.
VAT
VAT on business entertainment can’t be reclaimed, except for overseas customers where the entertaining is reasonable, and for employee entertainment. Keep the bill showing VAT and who attended.
Subsistence when travelling
If you travel away from your normal place of business, reasonable meals are allowable as subsistence. Lunch in your home town while working there isn’t.
Common mistakes
- Claiming client lunches as “business meetings”
- Not apportioning mixed lunches
- Claiming solo lunches near the office
- Reclaiming VAT on entertaining
Records to keep
Note who attended, the business purpose and the bill. HMRC often asks about attendees.
Conferences and events
If you attend a conference or seminar where lunch is included in the ticket price, the whole ticket is usually allowable as a business cost. The meal is incidental to the event, not separate entertaining, so it doesn’t need to be split out.
Frequently asked questions
Is coffee with a client deductible?
No, it’s still entertaining.
Can I claim a lunch with a business partner?
For partners, generally no.
Is room hire deductible?
Yes.
Can I give clients gifts instead?
Only gifts costing £50 or less per person a year that carry your branding, and aren’t food, drink, tobacco or vouchers, are deductible.
Related: donations to a youth club, LinkedIn subscriptions and business travel classes.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with business entertaining and expenses. See our small business accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
