Can You Claim VAT on Subsistence? UK Guide

Subsistence expenses are a common part of doing business—whether it’s grabbing a sandwich on the go or covering the cost of a meal during a client trip. But when it comes to VAT, the rules can be surprisingly strict. Many businesses assume they can reclaim VAT on meals, drinks and snacks—but that’s only partly true.

In this guide, we’ll explain what qualifies as subsistence, when VAT can be reclaimed, and where HMRC draws the line.

What Is Subsistence?

Subsistence refers to food and drink expenses incurred by employees, directors or contractors when travelling for work. This could include meals bought during a business trip, overnight stays, or even refreshments during long meetings away from the usual workplace.

HMRC sees subsistence as a necessary cost of business in some cases—but not all. Whether VAT can be reclaimed depends on context, location, and who’s incurring the expense.

VAT and Subsistence: The General Rule

You can reclaim VAT on subsistence only when it is incurred by an employee, director or volunteer while travelling for business. The expense must be wholly, exclusively and necessarily for business purposes, and not for routine personal consumption.

If you’re entertaining clients or non-employees, the VAT becomes subject to the business entertainment rules, and is not reclaimable.

Also, the supplier (restaurant, café, etc.) must be VAT-registered, and you must hold a valid VAT receipt that shows the VAT element clearly.

Subsistence Items You Can Reclaim VAT On

Assuming the right conditions apply (employee, business travel, etc.), you can typically reclaim VAT on:

• Meals taken while staying overnight for work (e.g. hotel dinners)

• Food and drink bought while travelling to a temporary work location

• Breakfast, lunch or dinner bought on a work trip

• Hot drinks bought during business journeys

• Room service meals in hotels when staying overnight for business

• Packed lunches bought for site visits or day-long meetings away from base

• Airport meals while travelling for business

Examples Where You Can’t Reclaim VAT on Subsistence

Despite the above, there are situations where VAT is not reclaimable. These include:

• Meals with clients, even during business discussions (this is business entertainment)

• Food bought for regular office days (routine meals aren’t classed as subsistence)

• Team lunches or staff parties (again, classed as entertainment)

• Meals purchased by self-employed individuals or contractors for themselves (HMRC views this as a personal cost)

• Alcohol in most cases, unless clearly part of a subsistence meal for employees on the move

If your employee buys lunch at their usual workplace, VAT cannot be claimed because the expense is not travel-related—it’s classed as a personal need, not business subsistence.

Grey Areas and Limitations

There are several areas where HMRC’s rules aren’t black and white, and that’s where businesses often get tripped up:

1. Routine journeys vs. irregular travel
   If an employee travels to the same place regularly (e.g. a weekly client site), HMRC may stop recognising this as “temporary travel”, which can make subsistence ineligible.

2. Subsistence vs. entertainment
   If you’re with a client—even just grabbing coffee—VAT is likely not reclaimable, even if you’re discussing business.

3. Company directors and one-person limited companies
   A sole director travelling alone has a limited case for reclaiming VAT unless the journey clearly meets the business travel rules. HMRC scrutinises these claims heavily.

4. Overseas travel
   You cannot claim UK VAT on food bought abroad, and claiming overseas VAT is more complex and often not worth the admin unless expenses are significant.

5. No VAT receipt
   A simple card payment or bank statement isn’t enough. You must have an itemised VAT invoice or receipt that lists the VAT amount clearly.

Final Thought

You can reclaim VAT on subsistence—but only when it’s tightly linked to business travel by employees or directors and not veering into entertainment or routine meals. HMRC takes a hard line on what it considers personal or non-essential. Always hold onto valid VAT receipts, and make sure the travel is legitimate and temporary.