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Stretch_Coach(Initiate)Initiate
23 Aug 2024

Hi all, I'm a new sole trader and regularly get together with people who want to discuss my services prior to booking. For example, I am meeting a psychologist on Monday who wants to hire me to run a workshop in her upcoming retreat. She suggested we meet for coffee/lunch to discuss the arrangements and venue, to see if it would be a suitable fit. Are the lunch expenses tax deductible as a business expense? Or should I eat before I go and drink water? This happens a fair bit in my business.

23,519 views
7 replies
23,519 views
7 replies

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Most helpful reply

Taxduck(Taxicorn)Taxicorn
23 Aug 2024

Food and drink outside of the office environment is an entertainment expense. This can't be claimed as a business deduction. See below.

Business tax deductions | Australian Taxation Office (ato.gov.au)

Entertainment. Link below explains this (is for employees but same rules apply for sole traders)

Entertainment and functions | Australian Taxation Office (ato.gov.au)

If you have a workplace then you could claim the cost of providing refreshments for potential customers/clients.

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Most helpful reply

Taxduck(Taxicorn)Taxicorn
23 Aug 2024

Food and drink outside of the office environment is an entertainment expense. This can't be claimed as a business deduction. See below.

Business tax deductions | Australian Taxation Office (ato.gov.au)

Entertainment. Link below explains this (is for employees but same rules apply for sole traders)

Entertainment and functions | Australian Taxation Office (ato.gov.au)

If you have a workplace then you could claim the cost of providing refreshments for potential customers/clients.

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Stretch_Coach(Initiate)Initiate
29 Aug 2024

Hmm ok Thanks @Taxduck. I don't actually have an office environment or place of business as I travel to various locations for work, but I wonder if we met at their place of business and brought food and drinks then would they be covered? Cheers

smallisbetter(Newbie)Newbie
22 Nov 2024

I don't have a workplace either and neither do the vast majority of my clients. We often meet online but sometimes we have to meet together; it is far more productive when we do.

I have tried the water only at a cafe and find some clients do the same.

We are then told that we must place an order. We can't sit in a cafe, rent-free, discussing business. This has happened a few times.

I'd be happy to claim this as a business expense. And happy for a discussion with the ATO in regard to the expenses of small business. Why should we be disadvantaged in business because we made the economic and logistical choice to not have a physical premises? Are we in the 2020s or still in the 1900s?

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Are Business Lunches Tax Deductable? | ATO Community