Entertainment expenses are generally 50% deductible, and it includes expenses such as meals and drinks consumed off the office premises. Half of the total expense need to be coded to Entertainment, while the other half is coded to Entertainment – Non-Deductible. To do so, go into the Bank Reconciliation screen, click Add Details to the entertainment transaction, and add a second line. Input the details, and for the quantity field enter 0.5 for both lines. Write in the full expense amount in the Unit Price box.
If the food or drink is brought into your office, it is generally fully deductible. If it is from travelling for work, it is fully deductible, and it should be coded to Travel Expense code. If you are paying for a meal with a work-related guest, it is 50% deductible, and should be coded 50% to travel and the other 50% to Entertainment – Not deductible.
