EXPENSES • 24 APRIL 2025 • 4 MIN READ

Claiming food as a business expense

Man drinking a coffee during a business trip.

SECTIONS

Claiming meals as a sole trader or partnership

Claiming food as a shareholder employee

Examples

Other travelling costs

GST implications

FBT implications

Conclusion

How can Beany help?

It’s been a few years since IRD released Interpretation Statement IS 21/06 on the deductibility of meals for business purposes, but the implications are still catching some business owners off guard.

The statement clarified the rules around deducting the cost of meals during the workday and while travelling for business, and the message was clear - in most cases, you won’t be able to claim them.

The key takeaway? Meals are considered a personal expense not a business one, as you still need to eat and drink whether you're at work or not.

Claiming meals as a sole trader or partnership

No food or drink can be claimed as a business expense. Not even if you’re away on business, staying at a hotel overnight or many nights, or attending a conference.
The only situation where meals and/or drinks can be claimed as a business expense is when you are ‘entertaining’ suppliers, wining and dining (potential) clients, holding staff functions, etc. These fall under the entertainment guidelines, where only 50% of the cost is deductible.
There are no exceptions to the above*. It’s black and white.

* Well…perhaps one. The only way a sole trader or a partner can claim meals with accommodation is if there are no self-catering motels available, and no supermarkets in the area. Even then, the amount claimed can only be the difference between the actual cost and what it would cost for you to have a meal at home. Good luck working that one out!

Claiming food as a shareholder employee

You’re in exactly the same position as sole traders and partnerships above, with one exception – if your signed employment agreement requires that your employer (the company) reimburse you for meals and drinks, or provide you with an allowance. Of course, what is an exception without strings attached?

The cost needs to be incurred when you’re away from your normal place of work for business purposes
The reimbursement must be reasonable and in line with the company’s agreements with other employees. For example, you can’t have an elaborate meal with expensive wine, while other employees are limited to a Subway sandwich
Entertainment and FBT rules may apply depending on the situation

Read more: What is Fringe Benefit Tax (FBT)?

Examples

Work travel

Ben travels between clients and doesn't get home until 8pm. He buys lunch, takeaway coffee and dinner during his travels. Can any of these expenses be claimed? No, they are considered personal in nature as Ben would still need to eat regardless of whether he was working or not.

Travel to a remote area

Kat travels to a rural part of the country where the only accommodation is a place with a restaurant. There is no supermarket nearby and no option to self-cater. Kat has no other option but to dine in the restaurant for dinner which incurs costs higher than she would have if she was having dinner at home. Can anything be claimed in this situation? Yes, the difference between what she'd normally spend on a dinner meal and the cost she incurred may be claimable.

Employee traveling for work

Bob is required by his employer to travel out of town for a couple of days to visit clients in other regions. Based on his employment contract he's entitled to be reimbursed for meals by the employer. Can the company claim these expenses? Yes, since the reimbursement is an employee expense, it can be deducted as a business expense.

Entertaining clients

Sally wants to grow the business and decides to take a potential client out for lunch to build the relationship. Can she claim the meal as an expense? Based on entertainment rules, she can claim 50% of the cost incurred while entertaining the client.

Other travelling costs

The costs of accommodation and travel to the location for business purposes continue to be deductible. When you travel for business purposes, you can claim the following expenses:

Flights
Taxis, or mileage or motor vehicle expenses if you use your own car for the business trip
Accommodation

If you’re travelling overseas, you can claim work-related expenses, including flights, taxis, and accommodations.

GST implications

You can only claim GST on the business portion of the meal expenses. If you need to make a 50% non-deductible adjustment on any meal expenses, then the same adjustment is needed for GST.

FBT implications

FBT tax is payable on meals directly provided by the employer to the employees as it's considered a type of benefit provided.

When your employee is far away from their normal work location for business reasons, tax exemption may be available for the full amount of the meal payments. However, there is a 3-month time limit on this.

A tax exemption also applies to payments for light refreshments (such as biscuits and coffee) when the employee is working away from their workplace most of the day, and the employer would normally provide the employee with similar refreshments.

Conclusion

Now you’re likely to be thinking to yourself But…, What if…?, What about…? The answer is probably no.

How can Beany help?

We understand that navigating business expenses and tax can be overwhelming.

As part of the tax return process, Beany's certified accountants check that all expense claims are accurate inline with New Zealand's accounting and tax legislation. You can also reach out throughout the year if you're ever unsure about the deductibility of any of your business expenses, GST application of the expense or anything else.

Alongside tax returns and financial statements, Beany provides a full suite of accounting services to clients. From bookkeeping to strategic forecasting, financial insights, management reports and more.

Book a call to discuss your accounting requirements and discover how we can help.