Networking Expenses

I run a small limited company as a business consultant and I attend a weekly networking breakfast event – this costs me £10 per week which covers the breakfast but the real benefit is that I get to meet people and build business relationships which sometimes leads to new business for me. Can I claim these networking expenses through my company?

 

Networking Expenses

 

Answer, November 2017

Networking events are a great way of getting to know similarly minded business people in your local area. Participants can share ideas, exchange referrals and build their professional reputation.

Attending networking meetings before the start of the business day is a popular format as it makes efficient use of your time.

When it comes to the tax treatment of attending these professional networking events we have to go back to a key rule which is that your business can claim as allowable expenses anything that has been incurred wholly, exclusively and necessarily in the course of running your business.

In your example the cost of the networking event includes breakfast – on the assumption that it’s not possible to attend the event without having breakfast, then any amount attributable to the breakfast costs will be incidental to the main purpose of the expense, which is networking for business development, so you can claim the £10 cost.

However if, for example, you can choose to pay £10 with breakfast or £5 without, you would only be able to claim the £5 cost of attendance.

Ideally the receipt that you get from the organiser will say something like ‘Business Networking Event’ rather than ‘Breakfast’ – otherwise HMRC could try and argue the food costs are not incidental.

You can also treat the cost of getting to and from the networking meetings as an allowable business expense. This could be added to your mileage claim if using your own car, or you could claim the actual cost of public transport, or even a taxi.

Parking charges incurred during the meeting can also be included as allowable business expenses.

Don’t forget the usual rules about travel between home and work, so only claim for the additional cost of getting from your workplace to your networking location. Not a problem, though, if you normally work from home.

These rules apply to sole traders and partnerships, as well as to limited companies.

The key thing to remember is to only claim for professionally organised networking events where any food costs are incidental.