Are client meetings tax deductible? We often get this question so we thought that some simple tips can help go a long way in working out whether you can claim a tax deduction. It often comes down to what is provided at the client meeting (i.e. food or drink). So what are some things you should you know:
- What is the purpose of the event – if food or drink is being provided in a social setting, then the chances are that the client meeting would be classified as entertainment and not tax deductible
- What is being provided in the meeting – is it a light meal provided at work or is it a set menu with matching wines. As the meal starts to become more elaborate, it starts to take the character of entertainment and is not tax deductible
- When is the meeting being held – meals provided during work hours are less likely to be entertainment, however with this point it’s especially important to consider the purpose and whether it is social.
- Where is the meeting being held – meetings held on your business premises (and meals consumed) are less likely to be entertainment. At a restaurant or cafe, it is more likely to be entertainment.
Are your client meetings tax deductible? Always make sure you consider these initial steps when looking at client meetings for your business.
And do you need more information on whether business lunches are tax deductible, read our article in Startup Daily here.
This Tax Tips Tuesday is brought to you with love by Nudge Accounting.