Subsistence - Exactly what can be claimed?

[Brett at Nixon Williams]

The exemption for overnight incidental expenses is indeed designed to cover the types of expenses mentioned such as newspapers, phone calls home and laundry i.e. costs of a personal nature.

Although this expenditure may arise as a consequence of working away from home, it is not incurred necessarily nor in the performance of the employee’s duties. As such, these expenses would not be allowable.

The exemption applies where an employer may reimburse the employee up to the maximum limits mentioned (£5 per night in the UK and £10 if overseas) to cover this type of expenditure.

Further information can be found in HMRC’s Expenses and Benefits guide (Booklet 480).

I hope this helps.

Brett

[CloudWalker]

Interesting... So This would be beneficial to a Field Engineer traveling to different sites and leaving before 6am

EIM05231 - Employment income: scale rate expenses: subsistence expenses: table of benchmark scale rates
The benchmark scale rates that apply from 6 April 2009 are as follows:


Description Amount (up to)
Breakfast rate £5
One meal (5 hour) rate £5
Two meal (10 hour) rate £10
Late evening meal rate £15


Qualifying conditions - Benchmark scale rates must only be used where all the qualifying conditions are met. The qualifying conditions are:

the travel must be in the performance of an employee’s duties or to a temporary place of work
the employee should be absent from his normal place of work or home for a continuous period in excess of five hours or ten hours
the employee should have incurred a cost on a meal (food and drink) after starting the journey

[northernladuk]

Interesting... So This would be beneficial to a Field Engineer traveling to different sites and leaving before 6am

EIM05231 - Employment income: scale rate expenses: subsistence expenses: table of benchmark scale rates
The benchmark scale rates that apply from 6 April 2009 are as follows:


Description Amount (up to)
Breakfast rate £5
One meal (5 hour) rate £5
Two meal (10 hour) rate £10
Late evening meal rate £15


Qualifying conditions - Benchmark scale rates must only be used where all the qualifying conditions are met. The qualifying conditions are:

the travel must be in the performance of an employee’s duties or to a temporary place of work
the employee should be absent from his normal place of work or home for a continuous period in excess of five hours or ten hours
the employee should have incurred a cost on a meal (food and drink) after starting the journey

But that is what you are not getting. If you call beneficial 20% (one whole british pound!) off a meal with the chance HMRC may want to look through your books with a fine toothed comb because they smell you taking the piss then yes it is beneficial.

[kevpuk]

But that is what you are not getting. If you call beneficial 20% (one whole british pound!) off a meal with the chance HMRC may want to look through your books with a fine toothed comb because they smell you taking the piss then yes it is beneficial.

I have never bothered with most of this; I work away from home, staying Mon-Thu nights in Spareroom-sourced accommodation (which is really perfect, convenient and cheap I should add).
I receipt my lunch from the local panini emporium every day and the odd (very occasional) meal in the evening. That's it - I guess there are benefits for claiming more, but as many have said it just raises the notability of your expense shenanigans.

[jamesbrown]

I beg to differ on both those points.

On the point that you can interchange between them though.... I thought you could elect to use receipted costs (if higher than the scale rates) even after applying for a dispensation to access the scale rates (afterall the dispensation is just to reduce reporting requirements when applying the scale rates), but perhaps not; do you have a link? A dispensation is needed to use the scale rates though. As Lisa says, there's a box on the P11DX and no sampling is needed when using the default rates (it would be needed for higher rates).

[northernladuk]

I have never bothered with most of this; I work away from home, staying Mon-Thu nights in Spareroom-sourced accommodation (which is really perfect, convenient and cheap I should add).
I receipt my lunch from the local panini emporium every day and the odd (very occasional) meal in the evening. That's it - I guess there are benefits for claiming more, but as many have said it just raises the notability of your expense shenanigans.

I would have no problems claiming everything that meets the rules clearly to be honest but don't go round chasing receipts. The point I was trying to make is not to get giddy and see this as free food or a reason to go and buy breakfasts where you wouldn't normally etc. Carry on your day, pick a receipt up where it is allowed and bung it all in when you have time. Nothing more, nothing less.

[LisaContractorUmbrella]

Interesting... So This would be beneficial to a Field Engineer traveling to different sites and leaving before 6am

EIM05231 - Employment income: scale rate expenses: subsistence expenses: table of benchmark scale rates
The benchmark scale rates that apply from 6 April 2009 are as follows:


Description Amount (up to)
Breakfast rate £5
One meal (5 hour) rate £5
Two meal (10 hour) rate £10
Late evening meal rate £15


Qualifying conditions - Benchmark scale rates must only be used where all the qualifying conditions are met. The qualifying conditions are:

the travel must be in the performance of an employee’s duties or to a temporary place of work
the employee should be absent from his normal place of work or home for a continuous period in excess of five hours or ten hours
the employee should have incurred a cost on a meal (food and drink) after starting the journey

Trouble is you can't claim for the cost of breakfast unless your early start is exceptional i.e. if you normally start work at 9am but have to be in at 6am for an early meeting you would probably get away with it but if your normal working day is 6am to 3pm you won't. The same applies to the cost for dinner.

EIM05231 - Employment income: scale rate expenses: subsistence expenses: table of benchmark scale rates

[Contreras]

On the point that you can interchange between them though.... I thought you could elect to use receipted costs (if higher than the scale rates) even after applying for a dispensation to access the scale rates (afterall the dispensation is just to reduce reporting requirements when applying the scale rates), but perhaps not; do you have a link?

Linky here:

Payments in excess of the benchmark rates
The benchmark rates are the maximum tax and NICs free amounts that could be paid by employers who choose to use this system. An employer could pay less than this rate if it wants to do so. If a higher amount is paid without agreeing a tailored scale rate with HMRC, the excess should be subject to tax and NICs.

I have read that to mean that if you have a dispensation to use the benchmark rates then it effectively caps the individual claims, but you can claim the full rate even where the amount incurred was less - some you win some you lose.

Your interpretation seems to be that the benchmark rates provide a floor to individual claims - some you win some you win. It wouldn't be too surprising if such a loophole existed so I don't particularly doubt you either!

[jamesbrown]

Linky here:

I have read that to mean that if you have a dispensation to use the benchmark rates then it effectively caps the individual claims, but you can claim the full rate even where the amount incurred was less - some you win some you lose.

Your interpretation seems to be that the benchmark rates provide a floor to individual claims - some you win some you win. It wouldn't be too surprising if such a loophole existed so I don't particularly doubt you either!

Oh, no, that isn't what I meant. The first statement is the correct interpretation in my understanding. In other words, you can claim anything up to the benchmark scale rate, which is the cap, i.e. the maximum amount, regardless of the actual costs (assuming the other conditions are met, i.e. a cost was incurred, for one). But you can surely claim an amount below that cap, if you so desire. I was talking about the choice of system over several separate claims. In my understanding, it's fine to use one system for one claim (e.g. actual receipted costs) and another system for a separate claim (e.g. benchmark scale rates), providing all other conditions are met (i.e. a dispensation is in place in the case of the scale rates). That way, you can choose the system that bests suits the claim. I wouldn't do this personally, as I would prefer consistency alongside accuracy with anything related to HMRC, so it was just a point of order - but I could be wrong about it anyway....

[jamesbrown]

Actually, on re-reading what you wrote, maybe you did understand me If you choose to apply the scale rates for a given claim, you're fixed by that system and hence by the cap for that claim (but you could claim less, in theory; why you'd want to, I don't know). The question is whether, for a separate claim (e.g. a week later), you could choose a different system, bound by different rules (e.g. receipted costs). I think, yes (indeed, if that's what you meant by "win-win", you understood me perfectly), but I'm not totally confident that I'm correct about that pick-and-mix approach being allowed (putting aside whether it is sensible).....