Overnight subsistence when staying in local rented accomm

[matzie]

Hi all

I'm a first-time contractor, well inside of IR35, and rightly or wrongly, I'm with an umbrella for now.

For my first month, I've stayed with family a lot nearer to my temporary place of work than my permanent home, but still a *very* long commute away.

As of next week, I've found a room to rent a few minute's walk away. It's only available weekdays, so it's fine for the wholly/exclusively/necessarily stuff. It's a room to let in a private house, and only includes the room and incidental use of the bathroom and kitchen.

My understanding is that if I were staying in a hotel, overnight subsistence costs would be allowable, (in addition to overnight incidential expenses, and daytime subsistence expenses on the scale). However, my umbrella say that since I'd be able to use the kitchen, I can't claim overnight subsistence costs in this case.

I've searched extensively but can't find any clear information about this situation. Does anyone have any information or advice for me please?

Thanks in advance,

Matt

[Steven@Parasol]

On the assumption that you are not staying with friends and family, then just because there is a kitchen available would not restrict the subsistence expenses that you incur. Nor would you be required to use the kitchen facilities, so you could eat out in a restaurant or claim the cost of the ingredients for you to cook your own meal.

The question to ask your umbrella company is will they let you reclaim the actual subsistence cost incurred if you provide a receipt rather than a round sum allowance. If their issue is with a round sum allowance then it is probably due to the terms of the agreement (dispensation) that the umbrella has reached with HMRC, but this would not stop you claiming the actual expenditure incurred.

[chef]

I have rented a house with kitchen in the past, my rental contract matched my work contract, i always came home at weekends, my contract got canned 2 months into a 6 month stint so i cancelled the house rental. I don't see a problem with either my previous or your current arrangement, it's an expense solely for business use and so the kitchen issue must be as Steven said, it's likely to be hte terms the umbrella has with hmrc, get a receipt and claim it that way, simples.

[matzie]

Thanks.

I'm with Parasol, incidentally, but was told on the phone that I couldn't claim anything for evening meals once I started renting accommodation. I've already emailed members@ and I'm awaiting an 'official' reply but the advice you've both given above matches my expectations, so I'll see what response I get back.

cheers

Matt

[Steven@Parasol]

Thanks.

I'm with Parasol, incidentally, but was told on the phone that I couldn't claim anything for evening meals once I started renting accommodation. I've already emailed members@ and I'm awaiting an 'official' reply but the advice you've both given above matches my expectations, so I'll see what response I get back.

cheers

Matt

Matt, can you drop me a quick line to [email protected] or PM mere here please with who you spoke to etc?

I just want to follow that up.

thanks

Steven

[Bob Jones]

We eat in order to live not in order to work but if the duties of the employment dictate that more is spent on meals than would otherwise have been the case then the excess is allowable. It is impossible to determine the excess therefore, provided extra has been incurred, HMRC will allow the full amount. It follows therefore that if you prepare food at home there is no extra cost and no allowance is due. There MUST be an extra cost. If you purchase your own ingredients and prepare the meal yourself there is no extra cost and there is no allowance.
For info - if you eat out HMRC could argue that because the kitchen is there you could have prepared your own meal and eating out was your own choice - but that I would be inclined to challenge. HMRC cannot dictate what you do and what you don't do - if the journey is allowable then the mode of transport is down to you. For example - if you are required to travel to London and you use the train HMRC cannot deny you first class travel on the grounds that you could have travelled second class - if the journey qualifies then the mode of transport is down to you - similarly if a manual worker's employer lays on a works bus but the worker uses his own car HMRC cannot deny relief simply because a bus was available.
I have gone slightly off the subject - food prepared at home - no extra cost - not allowable - eat out - OK
Bob

[LisaContractorUmbrella]

Sorry Steve but I agree with Bob on this one. If you were to cook a meal at the accomodation there would be no greater cost to you than if you were to prepare a meal at home -therefore no expense could be claimed. Even if scale rates were operated the individual would still need to prove that an additional cost had been incurred.

[matzie]

Thanks all.

Realistically, I can't see ingredients for a meal as being allowable, and never would have thought so, but for Steven's comments above. I agree with Bob's logic for meals purchased outside, and that's what I was expecting. (mind you, since my normal residence is Sheffield, and my weekday lodgings are in London, I could argue that there *is* an increased cost even to meal ingredients, which is entirely attributable to the working situation - but I'd rather not push that issue)

I had a reply from Parasol which said the same as I was told on the phone, "You wouldn’t be able to claim for overnight subsistence as you have access to a kitchen". I've forwarded this to Steven and I'll see what happens next.

Practically speaking, the owner of the house where I'll be staying is not especially keen on me using the kitchen at all, and very much wants me to stay out of the way as much as possible - the very low price and perfect location mean I'm still okay with that - so I probably will incur eating-out expenses most days. I suppose that one way to resolve the issue would be for the receipts she's giving me to clearly state that kitchen is not available for use at all, but I would hope that Parasol would get everyone on the same page about this, and that wouldn't be necessary.

thanks

Matt

[Steven@Parasol]

Sorry Steve but I agree with Bob on this one. If you were to cook a meal at the accomodation there would be no greater cost to you than if you were to prepare a meal at home -therefore no expense could be claimed. Even if scale rates were operated the individual would still need to prove that an additional cost had been incurred.

Lisa don't apologise, I think this is a really interesting one and its good to get your view.

Matt - us debating this on here doesn't help you so I have emailed you directly to sort this out for you.

I agree and disagree with Bob. HMRC has set out their view in EIM31815.

I agree with Bob in that if food was prepare at HOME and taken to the temporary accommodation then HMRC would like to deny the relief. However, if the ingrediants were purchased at the temporary accommodation and a meal made then HMRC would allow the cost of the items purchased. The crux of the matter is the subsistence part of the overall cost of the business journey.

Bob I also agree that HMRC can not deny the level of expenses being incurred. By way of example, if I usually spend £5 per night eating at my normal home but I am away on business and decide simply to spend £3 on a starter and eat nothing else HMRC would not deny me the £3 claim even though it is less than the amount I would normally spend.

[LisaContractorUmbrella]

From EIM31815: To qualify for a deduction the subsistence costs must be attributable to the business travel in the sense that they are costs incurred in the course of the journey that are additional to any costs that the employee would incur if it were not for the business travel.

If the contractor were to have eggs, chips and beans at home in London it would cost a couple of quid - it would cost the same for the ingredients if they were purchased in Birmingham therefore there are no additional costs.