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Subsistence Claims

Subsistence Claims

A History of Subsistence Claims – Food & Drink

The rules around subsistence have always been an area where rumour and hearsay provided confusion and misunderstanding of the facts.

This was not helped by changes introduced by statutory instrument in 2016 which proceeded a system of dispensation and preauthorised agreements with HMRC for reimbursements.

The new rules introduced benchmark scale rates, however, to claim these a company had to meet a set of qualifying conditions, which many companies were unaware of.

New Rules from April 2019

Historically HMRC allowed for reimbursements to employees based on a time spent away from their ‘usual place of work’, this would typically be identified based temporary workplace rules.

These Benchmark Rates remain at:

  • 5 hours – £5
  • 10 hours – £10
  • 15 hours – £25*

*Still ongoing at 8pm

The significant changes to the rules introduced in April 2019 is that there is no longer a requirement on the company to have a system in place to check that any expenses has been incurred. So receipts are no longer required. That said, there is a requirement to ensure reimbursements are made only for relevant qualifying business travel.

Benchmark vs Actual

If an employee produces an actual expense receipt for food and drink this can be reimbursed above the scale rates above, this would be fine, the cost would be allowable in the company and no benefit in kind charge would apply to the employee.

The Benchmark Scale rates above are only for reimbursements of cash to employees where no actual receipts are provided. Should you pay above these rates the employee may incur a charge to tax and national insurance unless rates are agreed with HMRC.

Benchmark rates for overnight accommodation have not been provided by HMRC and as such expenses must be accounted for at actual cost.

Overseas rates are provided here, and again, it may be advisable to simply reimburse for actual cost based on receipted value.

Are you claiming all the reliefs available?

We ensure all clients claim maximum reliefs and allowance, especially when it comes to Travel and Subsistence. If you feel your accountant has not provided you with the same level of service, contact us today to arrange a free consultation.

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