Meal allowances for overnight business travel.

[Newchodge]

I am struggling to find any details about what expenses can be paid that don't amount to taxable income.

Business trip starting at 10:00 Sunday, ending 18:00 Monday
Taxis between station and home/hotel/meeting venue
Train fares
Refreshments on train
Hotel bill room and breakfast
Evening meal
Lunch

I assume the taxis and train fares are reimbursable, and the hotel room.
What about the food related items?

If you can point me in the right direction to find the details it would help!

 

[Daybooks]

For income tax purposes:

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim47705

The benefits code:
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim20006

 

[Newchodge]

For income tax purposes:

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim47705

The benefits code:
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim20006

Thanks. Is that only for sole traders, or does it apply to employees/directors as well, please?

 

[UK Contractor Accountant]

Travel and subsistence costs

www.gov.uk

 

[UK Contractor Accountant]

HMRC Approved Subsistence Rates (2024)​

HMRC provides standard meal allowance rates for employees who are required to work away from their usual place of work. As of 2024, the rates are as follows:

Day Rates (For Meals)​

Breakfast Allowance: Up to £6.00
This is eligible if the employee leaves home before 6:00 AM and buys breakfast away from their home or workplace.
One Meal Allowance (5 hours): Up to £5.00
Applicable if the employee is away from their normal place of work for at least 5 hours and incurs the cost of a meal.
Two Meal Allowance (10 hours): Up to £10.00
This applies when the employee is away for at least 10 hours and buys two meals (e.g., lunch and dinner).
Late Evening Meal Allowance: Up to £15.00
This is available if the employee is required to work after 8:00 PM and buys a meal as a result.

​

Overnight Rates (For Accommodation)​

UK Overnight Stay: Up to £25.00 for incidental overnight expenses.
This applies when the employee is required to stay overnight for business purposes within the UK.

​

International Overnight Stay​

Rates vary by country and typically cover both meals and accommodation. HMRC provides detailed country-specific rates for international travel.

Key Conditions for HMRC Subsistence Rates​

To claim these rates tax-free, the following conditions must be met:
Receipts
Employers must retain proof that the employee incurred the expenses. However, receipts are not mandatory for meal allowances if the flat-rate subsistence was used.
Business Journey
The travel must be business-related and outside of the employee’s normal working area. Routine commutes to regular places of work do not qualify for this.
Maximum Amounts
Employers can pay employees subsistence amounts up to the HMRC’s approved rates without the payments being taxed. Payments exceeding these rates may be taxable as additional income.

How to Report and Reclaim Subsistence Payments​

For Employers
If the subsistence payments fall within HMRC’s approved rates, there is no need to report them on a PAYE Settlement Agreement (PSA) or through payroll. If they exceed the rates, they must be reported as taxable benefits.
For Employees
Employees should submit claims for expenses with appropriate receipts to their employers. If an employee spends more than the provided subsistence rate, they may still claim tax relief on the difference, provided they can prove the extra cost was necessary for business purposes.

 

[Daybooks]

Thanks. Is that only for sole traders, or does it apply to employees/directors as well, please?

The first one is for income tax - thus sole traders. The second one is the potential benefit in kind situation if paid by company to its employees or directors. That is what I thought your query was about.

 

[Newchodge]

HMRC Approved Subsistence Rates (2024)​

HMRC provides standard meal allowance rates for employees who are required to work away from their usual place of work. As of 2024, the rates are as follows:

Day Rates (For Meals)​

Breakfast Allowance: Up to £6.00
This is eligible if the employee leaves home before 6:00 AM and buys breakfast away from their home or workplace.
One Meal Allowance (5 hours): Up to £5.00
Applicable if the employee is away from their normal place of work for at least 5 hours and incurs the cost of a meal.
Two Meal Allowance (10 hours): Up to £10.00
This applies when the employee is away for at least 10 hours and buys two meals (e.g., lunch and dinner).
Late Evening Meal Allowance: Up to £15.00
This is available if the employee is required to work after 8:00 PM and buys a meal as a result.

​

Overnight Rates (For Accommodation)​

UK Overnight Stay: Up to £25.00 for incidental overnight expenses.
This applies when the employee is required to stay overnight for business purposes within the UK.

​

International Overnight Stay​

Rates vary by country and typically cover both meals and accommodation. HMRC provides detailed country-specific rates for international travel.

Key Conditions for HMRC Subsistence Rates​

To claim these rates tax-free, the following conditions must be met:
Receipts
Employers must retain proof that the employee incurred the expenses. However, receipts are not mandatory for meal allowances if the flat-rate subsistence was used.
Business Journey
The travel must be business-related and outside of the employee’s normal working area. Routine commutes to regular places of work do not qualify for this.
Maximum Amounts
Employers can pay employees subsistence amounts up to the HMRC’s approved rates without the payments being taxed. Payments exceeding these rates may be taxable as additional income.

How to Report and Reclaim Subsistence Payments​

For Employers
If the subsistence payments fall within HMRC’s approved rates, there is no need to report them on a PAYE Settlement Agreement (PSA) or through payroll. If they exceed the rates, they must be reported as taxable benefits.
For Employees
Employees should submit claims for expenses with appropriate receipts to their employers. If an employee spends more than the provided subsistence rate, they may still claim tax relief on the difference, provided they can prove the extra cost was necessary for business purposes.

Thanks.

So if the £5 per meal allowance is not exceeded, there is no HMRC involvement. If it is exceeded it may still be tax free, but needs justifying? So employer taxes it and the employee tries to claim it back on SA?

An entire day's meals for £10? These days?

 

[UK Contractor Accountant]

Employees are eligible for tax relief on the actual costs of subsistence, i.e. meals and drinks incurred as a result of business travel.

Employers can reimburse their employees’ actual costs or use HMRC’s benchmark rates to make daily subsistence payments free of tax and NICs, without the need for receipts or prior agreement from HMRC.

To qualify, there must be a system in place for checking that the employees are actually incurring and paying some costs of the same kind (though not necessarily the same amount), for which tax relief would be allowable. Employers do not have to use the published rates and can apply to HMRC to agree their own bespoke scale rates.

 

[DWS]

Basically, if you have the receipt and can justify the expense then the Company can reimburse and claim as an expense or just pay for the the cost in the first place.