Is My Coffee Tax Deductible?

Jerelyn Aglibao
Oct 31
5 min read

A company meeting where attendees have their own cup of coffee.

The fundamental rule: “wholly and exclusively”

Any business expense must meet the well-known principle: to be incurred wholly and exclusively for the trade, profession or vocation.

For self-employed sole traders, this is spelt out clearly: you can only deduct expenses which are incurred “wholly and exclusively” for running your business.

So when it comes to buying a coffee in a cafe, you need to ask, “Is this expense really just for business?” or “Is part (or all) of it personal?” If it’s at all dual-purpose (business + personal), then HMRC will likely disallow (or partially disallow) the deduction. Unlike other expenses, coffee (or other drinks for that matter) is a common question and one that often causes the most confusion.

Everyday Coffee vs Business Coffee – A Key Distinction

Everyday Coffee

If you stop by a café, grab your latte on your way into work, or have a “team coffee break” in your local while you do your usual work routine, then this is very likely not tax-deductible.

Why? Because:

It’s part of your normal working routine (i.e., your place of work or regular cafe) – such expenses are more personal than business. This doesn't mean, just switch around the cafes you go to!
It doesn’t clearly meet the “wholly and exclusively” test because you’re doing something you would likely do anyway, personal caffeine fix included.

Example: You work from a home office or a co-working space, and you pop out to a cafe for a coffee. Unless there’s a clear business necessity (e.g., meeting a client, temporary place of work), HMRC and professional commentators say you’ll struggle to claim.

Business-related Coffee

There are circumstances where coffee can be an allowable business expense, but the burden is on you to show the business purpose. Some of those include:

You are meeting a client/prospective client in a cafe purely for business discussions, and the coffee expenditure is part of that meeting. But — and this is a big but — buying coffee for a client may count as entertaining, which has different rules (see next section).
The coffee is bought while travelling away from your usual place of work (i.e., a “temporary workplace”) and the expenditure is subsistence for a clear business trip purpose.
The coffee cost is for staff refreshments (in an office/working environment) rather than for clients, so that the cost is wholly for business. For example, the company provides unlimited tea/coffee in the office kitchen for all staff. In that scenario, the cost may be deductible as an overhead.

When Coffee Costs Become Non-deductible Entertainment

If the coffee purchase is aimed at clients, potential customers or involves some “hospitality” or “entertainment” element, the rules are more restrictive.

Here’s what the rules say:

HMRC guidance for self-employed says you cannot claim expenses for “entertaining clients, suppliers and customers”.
The distinction between “light refreshments” (e.g., tea/coffee in your own workplace) and formal hospitality is important. For instance, providing free tea & coffee for staff in the office may be fine; buying a café coffee for a client is likely hospitality and not deductible.

Hence, if you buy a coffee for a client in a cafe, claiming the cost as a business expense is highly doubtful because it will likely be classed as client entertainment (not wholly your business) and thus disallowed.

It's important to note that just because the expense might not be tax-deductible, it doesn't mean the company can't pay for it, i.e. pay for the coffee on a company debit/credit card. It just means that the business will not be able to benefit from any tax deductions as a result of the expense.

Practical Checklist: Can you claim that coffee?

Here’s a practical mini-checklist for you to go through before deciding to claim a coffee in a cafe as an expense:

Was the coffee purchased in the course of business (not personal)?
- Was the meeting with a client/prospect for a business purpose?
- Or was it a personal break / normal routine?
Is the location a “normal place of work”?
- If you routinely work at home/office and you visit a cafe just for coffee, that is your normal routine, and you’re unlikely to get relief.
- If you were travelling, visiting a client, or away from your usual workplace, then you might have more justification.
Was the expense incurred “wholly and exclusively” for business?
- Could you argue you bought for both personal and business reasons? If yes, it's likely disallowed or partial.
- Did you purchase the drink only because of business (e.g., you met a client and bought the coffee as part of the meeting)? Possibly allowed (subject to the “entertainment” issue).
Was the coffee for staff (all staff in a business environment) or for clients?
- Staff refreshments: more likely allowable as overhead.
- Client refreshments/hospitality: more likely classed as entertainment → not deductible.
Have you kept evidence?
- Receipt showing date, cost, and location.
- Note/business purpose: Who attended? What was discussed? Why needed?
- Using a business card/account rather than a personal card helps.
Check whether this is “entertainment” or not.
- If the primary purpose is socialising or client hospitality rather than business conduct, HMRC may disallow.

Example scenarios

Scenario A: You, as a sole trader, go into a café between jobs and buy a flat white while working on your laptop. This is your routine working place; you could have made coffee at home. Claiming that cost would be very weak.
Scenario B: You travel to a client site outside your normal area, you stop at a cafe on route, buy a coffee, and meet the client there for a business discussion. The coffee cost may be justifiable as subsistence/travel-related. You’ll still want to document the business meeting clearly.
Scenario C: Your limited company has an office, and the company buys coffee and tea supplies so that all staff (and any visitors) can help themselves in the office kitchen. This is an overhead, available to all staff, and likely allowable.
Scenario D: You meet a potential client in a cafe, you buy your own coffee plus their coffee, have a business discussion, and perhaps snacks. The client’s coffee and snacks are hospitality and thus non-deductible; your coffee might be argued as business travel/discussion, but is grey.

Recommendations

Set a clear expense policy, especially for small incidental purchases like coffees. Define when coffee meets business use and when it is purely personal.
If staff or directors are buying coffee for staff use (in the office or meeting room), then keep receipts and record them as staff refreshments.
If buying coffee and meeting a client in a cafe, make sure the main purpose is business and not social. Logs: date/time/client name/meeting purpose – though even then note risk of “entertainment”.
Encourage using a dedicated business card/account for such purchases so the trail is clean.
Advise caution: if the cost is modest, it might be accepted, but no guarantee. Being conservative is wise: if it leans personal or social, don’t claim.
For one-off travel situations (temporary workplace) where coffee is bought outside your normal working location, remember to keep the documentation.
Always remember: just because you buy a coffee on business doesn’t automatically make it allowable. The “wholly and exclusively” test and the “ordinary commuting/normal workplace” rules still apply.