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Some entertainment expenses are 100% deductible.

Do you know which types of expenses fall into this category?

If you or one of your employees are travelling on business, you are entitled to claim 100% of the cost of meal.

At a glance, this seems to be at odds with the rule that states that food and drink provided away from your business premises is only 50% deductible.

You also need to consider if the purpose of the trip is mainly for enjoying entertainment. If this is the case, the cost of the meal becomes a supporting expense and is only 50% deductible.

The 50% rule also applies if there are existing or potential clients as guests at the meal or function, and if the meal is a celebration, party, or similar occasion while travelling.

Another specific rule states that Food and Drink you provide at a conference, education course or similar is 100% deductible, if the event lasts more than 4 consecutive hours (not including meal breaks)

The above highlights the need to check carefully and make sure you have a good understanding of the rules when there is a mix circumstances which may give rise to different rates.

As qualified accountants, we can advise and help you determine the correct treatment of your expenses. You can contact us or visit the IRD website for further information.