External meetings / client consultancy expenses claimable
We often get queries about claimable expenses for people who meet with clients at external venues eg cafes--meals, travel etc. Can you and your clients claim for these meetings?
Is the provision of food and drink (or a cup of coffee) a business deduction?
- What is the purpose of the expense? Is it just refreshment-- then it isn't entertainment and it is likely to be deductible without FBT.
- Morning and afternoon teas and light meals are generally NOT entertainment.
- Food or drink provided during work time (maybe as part of a business meeting at a cafe) is less likely to be entertainment and therefore is likely to be a business deduction.
- Where and when and in conjunction with what else is the expense incurred? If consumed at the place of business then less likely to be entertainment. However if consumed at a cafe or coffee shop it becomes more likely to be entertainment. However, what else were you doing at the time?
Generally there is NO tax deduction for the provision of entertainment! Call it marketing, call it a business meeting or whatever but really if it smells and feels like entertainment of a client then it is unlikely to be a business deduction.
Generally a cup of coffee, morning tea at a cafe that really is just where you decided/needed to have your meeting with the client is more likely to be OK.
Especially if you are a home office based provider or you really don't have your own office at all.
ATO, FBT and entertainment - Income tax deductibility
ICB Guide to FBT
Updated: 4th August, 2014