Reply to: Overnight subsistence when staying in local rented accomm

[LisaContractorUmbrella]

so how does it work if you were staying somewhere for say 6 weeks?

You move into a house share / lodging or room somewhere - and you have use of a kitchen - BUT you dont get all your coffee / tea / ketchup / salt / pepper / mayonaise etc supplied.

Can you claim for the duplicate purchase of all those items? (I am assuming you already have them at home)

Ta in advance (and sorry if it sounds thick)

Lea

No unfortunately you can't. The reasoning is that although you have to purchase the ketchup you are using in your lodging room, the ketchup that you have at home is not being used and will be available to you when you return therefore you will not actually be consuming more ketchup than you would normally, therefore there is no additional cost and therefore the kethcup cannot be claimed as an expense.

[escapeUK]

I was with an umbrella, which was also Parasol.

Its so much easier to have your own company, charge vat, pay no national insurance. Then you make so much that who cares about the tax on £5 a day food.

[Lea]

so how does it work if you were staying somewhere for say 6 weeks?

You move into a house share / lodging or room somewhere - and you have use of a kitchen - BUT you dont get all your coffee / tea / ketchup / salt / pepper / mayonaise etc supplied.

Can you claim for the duplicate purchase of all those items? (I am assuming you already have them at home)

Ta in advance (and sorry if it sounds thick)

Lea

[Bob Jones]

As I said originally we eat in order to live not in order to work - that cannot be denied. On that basis food is simply not allowable in any manner, shape or form - the expense is dual purpose and is simply not allowable. However - HMRC do recoginise that, for example, if you are travelling along a motorway and need to eat you may have to call at a motorway service station and pay inflated prices - if you are staying away overnight you will have to eat and probably at an expense more than would otherwise have been the case.

Steve states

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.

EIM 31815 makes it quite clear that the costs must be additional costs - it doesn't matter whether you are preparing meals at home and taking them to a temporary workplace or purchasing and preparing them at the temporary workplace. The crux of the matter has to be that there is an extra cost. There is an argument that the cost of self prepared food will vary from location to location but equally it varies within locations - there is simply no definitive answer - all we can be sure is that it is cheaper to eat in compared with the same meal at a restaurant.

Steve goes on to say

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.

Yes they would.

Why can't we be sensible over this - we all have to eat otherwise we will waste away, become skin and bone and die. Why should the governement subsidise our need to eat? On the other hand if we are earning money and during working time we are away from our usual surroundings and, as a result, we have to spend more than would otherwise have been the case surely the government could help us with the extra expense - and they will - in fact they will do more because if you spend more they will give you the lot and not just the extra ..

We could go on for ever over this - eg an egg costs me 10p as I go straight to the farm - but it costs me 12p from the supermarket or I shop at Aldi when I am at home but the nearest supermarket when I am working is Waitrose ... for goodness sake we all have to eat ..


Bob

[BolshieBastard]

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). pb]However, my umbrella say that since I'd be able to use the kitchen, I can't claim overnight subsistence costs in this case. [/b]

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

And this is why you should just say 'No!' to brollies.

[Brussels Slumdog]

Hi all

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.

Matt

Make sure that the invoice includes the words " Room only" and excludes the use of the kitchen which would be easy to arrange if you are renting from a family who is also living in the house,

[matzie]

I like how someone from an umbrella can be giving advice on the phone to their client which is contradicted by an employee working for the same company on a forum. Not to mention naming a member by their first name on the forum. Good form!

I used my first name myself, so that's not an issue.

But for me the story here is that Parasol reps are in the forum, engaging in constructive dialogue and working out an answer. Every company sometimes has discrepancies between the parrot-fashion answers given by support staff who are often targetted on a certain number of calls or emails responded to per day, and the answer to questions that don't quite fit in the neat boxes and require a synthesis of information from multiple sources. I'm sure that Parasol will work this out, train their support staff appropriately, and generally get it sorted.

Thanks

Matt

[Stag Cozier]

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

I like how someone from an umbrella can be giving advice on the phone to their client which is contradicted by an employee working for the same company on a forum. Not to mention naming a member by their first name on the forum. Good form!

On Matzie's OP, either claim the actual cost of your ingredients that you purchase whilst staying at your temporary workplace or claim the actual cost of your meal out whilst staying away. Don't claim for sandwiches, pack lunches or ready meals cooked or brought from home (not that anyone would).

On another note, a dispensation with an umbrella doesn't mean you can just claim the allowable amount that is in place e.g. if there is a dispensation with an umbrella of £5 per day that can be claimed, what that means is that you can claim up to £5 per day without providing the brolly with a receipt. You should still get a receipt for any expense you incur and claim the actual cost.

[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.

[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.

[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

[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.

[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

[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

[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