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Hi Terri
There is a distinction between what is a business expense and what is tax deductable. One prime example of this is entertainment - it is perfectly OK to record entertainment expenses in the accounts, but when the Accountant comes to do the tax return, they will add the entertainment expenses back to the profit in the tax computation, as these are not allowable for tax deduction.
When your client meets with her clients and buys them food or drink, this is entertainment and you should record this expense as such.
When your client buys food or drink for themselves, this is subsistence - and the rules for tax deductability are outlined here:
http://www.hmrc.gov.uk/manuals/bimmanual/bim47705.htm
You might want to set up two expense categories (nominals) for subsistence so you can record that which you are sure definately meets the tax deductable criteria and those for which are not sure (or are sure don't), separately. When you submit the books and records to the accountant, you can explain to him that this is what you have done. (And he should be pleased and impressed - as this will make his job easier!) It is then up to him to take a view on how to treat this expenditure in the tax comp.
Hope that helps - and would love to know how you get on :)
Edited at 11 Dec 2014 09:26 AM GMT
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