Food Allowance

[SueEllen]

Breakfast I can understand, if you are out of the house sufficiently early to not be able to have breakfast at home.

But lunch?

My understanding is that you would need to provide lunch if you were at your normal place of work anyway, so claiming for it when you aren't is a no-no....

Exactly my understanding as well.

If you bother to read through the numerous documents HMRC has on their website about different expenses as an employee (which you all are if you are working under an umbrella company) you should not be claiming for lunch.

You can claim for breakfast and dinner if you are not home at the "normal" time.

And just ask people for receipts. Most people are happy to scribble something just make sure you have a pen or two that works on you.

Just hope none of you are audited.

[Beefy198]

My umbrella's requirements for breakfast, lunch and dinner are:

breakfast - must leave the house before 7:30am

lunch: Clientco must be 5 or more miles away from home

dinner: must have stayed at work past 6:30pm.

That's ludicrous... but only in my opinion.

My understanding is that food costs are not claimable unless in very certain circumstances, i.e. pretty much not being at home. It's the duality of purpose argument - you eat to live and not to work.

And five miles is nothing of a commute when you think of it... I'd like to see where the HMRC have written that. In short, they haven't and the brolly is just making it up out of thin air.

Think about it - most employees in this country can't claim food costs as a tax deductible expense so what makes you so special?

Anyway, it's not like you realise the cost back. Much better to make yourself a bowl of cornflakes in the morning and take a packed lunch (I only say that as I've spoken to umbrella users before who seem to think that they financially benefit by eating out and then putting it through the brolly)

[pmeswani]

My umbrella's requirements for breakfast, lunch and dinner are:

breakfast - must leave the house before 7:30am

lunch: Clientco must be 5 or more miles away from home

dinner: must have stayed at work past 6:30pm.

For myself... the first 2 apply. The 3rd one is slightly different... it is a case of not getting home within 11 hours of leaving home to get to work.

[Bob Jones]

I have covered this briefly at http://www.contractoralliance.co.uk/...lowances.phtml I didn't want to go into too much detail as on the Contractor Alliance website I have tried to cover all aspects of travel expenses - the whole issue of expenses is complicated as it is – anyway - it is 100% right that we eat in order to live and not in order to work but if the duties of the employment dictate that more is spent than would otherwise have been the case then the "extra" is allowable. The allowance of the “extra” is impossible to apply in practice and HMRC will allow the total if extra has been spent (and of course the claimant holds a travelling appointment or is travelling to a temporary workplace) – it begs the question that if you are buying a few bits and pieces from a market stall you are not spending more than would otherwise have been the case – you cannot claim for eating – you can claim only for the extra amount spent on food where that is genuinely the case and that it is the duties of the employment dictate that extra is spent (as opposed to nature of the duties causing more to be eaten) .. in practice HMRC will allow the whole of the expenditure where that is the case.
Scale charges are amounts negotiated between employers and HMRC – but there is still the overriding rule that more has to have been spent than would otherwise have been the case.
My office is in Chester (true) – I buy a ready meal from the local supermarket £2.75 (true) and pop it in the microwave. On Thursday I am going to Ashford, Kent for a meeting (true) – say I buy a sandwich from the local shop - £2.50 – I can claim – nothing .. but say I go into a café and pay £5.50 – I can claim £5.50.
Say I am employed by an Umbrella on a 30 month contract – the Umbrella has a scale charge £6 for lunch - I buy a ready meal from the local supermarket and pop it in the microwave – I can claim nothing as the contract is in excess of 24 months – say I am required to visit another workplace for the day – 250 miles away – I buy a sandwich for £2.50 – I can claim – nothing - I have not paid “extra” … but say I go into a café and pay £5.50 – I have spent more than would otherwise have been the case and I can claim the scale charge of £6. It is NOT simply a matter of - I am away from home for the required period of time and therefore I am entitled to claim.
This is a copy of an article I wrote some time ago – scroll down to “receipts” and the following paragraph “practical effects” …. http://www.internet-taxation.co.uk/dispensations.htm

Regards

Bob

[dang65]

The allowance of the “extra” is impossible to apply in practice and HMRC will allow the total if extra has been spent (and of course the claimant holds a travelling appointment or is travelling to a temporary workplace) – it begs the question that if you are buying a few bits and pieces from a market stall you are not spending more than would otherwise have been the case – you cannot claim for eating – you can claim only for the extra amount spent on food where that is genuinely the case and that it is the duties of the employment dictate that extra is spent (as opposed to nature of the duties causing more to be eaten)

I'm currently working in Germany. When I work at home, or close to home, I have a pack lunch put together from the cupboard/fridge using stuff I bought from the supermarket with the week's shopping. When I'm working away from home I might buy a sandwich, a drink, some fruit or chocolate. How I'm supposed to calculate differences in costs I don't know. I've never thought about it in 8 years of contracting, and before that as a permie. I've always claimed travel, accomodation and food expenses when working away from home, and no one has ever questioned me about it, either as a permie, umbrella employee or via an accountant with my own ltd co.

There are people out there who will eat a full meal in a restaurant every day when they're away from home, and have a room service breakfast in the hotel each day, and they must put through enormous claims each month.

I'm not saying you're wrong in what you say. Just that it's common practise to claim such expenses, and alarm bells do not seem to ring anywhere when they are claimed. I definitely spend more when I'm working away than I do at home, and I work away from home in order to bring in money for the company. I always thought that's what such expenses were about and why they were justified.

[LisaContractorUmbrella]

Dang65 - it would really depend on your circumstances. If, when you worked abroad, you rented a flat then there really will be no additional cost to you for food as, to all intents and purposes, you would be in the same position as you are at home. However, if you stayed in a bed and breakfast or a hotel you would not have facilities to prepare food in your room and would have to eat out and therefore the cost would be a legitimate expense.

[pmeswani]

Dang65 - it would really depend on your circumstances. If, when you worked abroad, you rented a flat then there really will be no additional cost to you for food as, to all intents and purposes, you would be in the same position as you are at home. However, if you stayed in a bed and breakfast or a hotel you would not have facilities to prepare food in your room and would have to eat out and therefore the cost would be a legitimate expense.

A friend of mine runs a reseller. When he goes and meets a client, he will buy some food on the way to the client (breakfast - if it is early), buys lunch (either alone or with the client) and dinner (on his way back). He claims the money back as expenses against the compan.y Why is this scenario different to being a contractor? I am curious.

[TheFaQQer]

A friend of mine runs a reseller. When he goes and meets a client, he will buy some food on the way to the client (breakfast - if it is early), buys lunch (either alone or with the client) and dinner (on his way back). He claims the money back as expenses against the compan.y Why is this scenario different to being a contractor? I am curious.

It's no different.

EVERYTHING is claimable. Whether there is a BIK implication (that you may or may not be aware of!) is a different question.

[pmeswani]

It's no different.

EVERYTHING is claimable. Whether there is a BIK implication (that you may or may not be aware of!) is a different question.

That's a fair point. However, if ones dispensation allows you to claim a daily amount in food (whether it is brekkie, lunch and / or dinner), as long as it is within agreed limits, it should be claimable. I wouldn't expect a permie to be able to claim these as a business expense, but there again, they have other benefits that we dont get from the client.

[TheFaQQer]

That's a fair point. However, if ones dispensation allows you to claim a daily amount in food (whether it is brekkie, lunch and / or dinner), as long as it is within agreed limits, it should be claimable. I wouldn't expect a permie to be able to claim these as a business expense, but there again, they have other benefits that we dont get from the client.

No - a dispensation means that you don't need to declare non-taxable expenses (in certain categories) on a P11D.

That doesn't mean that you can claim anything - e.g. my company has one for accommodation and subsistence, to an unlimited value. That doesn't mean that I can claim anything I want as subsistence, though.

Also, just because a company has a round sum agreement with HMRC, that doesn't mean that all expenses in that category are claimable - as Bob explained earlier.

Finally, why wouldn't a permie be able to claim them, if a contractor can? You are an employee somewhere, so why should the rules be different?