Reply to: subsistence allowance

[Brian Potter]

Spending time in the graveyard?

[CloudWalker]

I was claiming £5 pd for Food and Drink but my accountant said only Big Businesses can do this?

"You have been entering your expenses at a flat rate of £5 per day which is not allowable as you should be claiming the total receipted amounts for the expenses you incur. In order to be able to claim a day rate you would need a dispensation from HMRC, which our only given out to larger companies that have high volumes of expenses."

Funny because when I was under their Umbrella company I could claim up to £20 subsistence

[LisaContractorUmbrella]

Thanks for the input. Is it possible to apply scale rates only for travel outside of UK, and actuals for travel within UK?

There are published rates for daily subsistence outside UK http://www.hmrc.gov.uk/employers/wwsr-bench.pdf. These don't need to be applied for as with UK scale rates as it is HMRC's opinion that most employers will not have large enough numbers of staff travelling overseas to warrant a dispensation

[JumpingIn]

If you apply for scale rates you are obliged to use them I believe

Thanks for the input. Is it possible to apply scale rates only for travel outside of UK, and actuals for travel within UK?

[LisaContractorUmbrella]

If you apply for the dispension using the benchmark scale rates, are you then obliged to apply the subsistence expenses regime for every business trip, or can you choose to switch on occasion to reimbursing actual expenses (with receipts) for the trips where the actual expenses turn out to be higher than the benchmark scale rates?

If you apply for scale rates you are obliged to use them I believe - you can't revert to actual expenditure just because it may be higher than the scale rate allowance as there would be times when your expenditure was less than the scale rate allowance and this would therefore give you a tax advantage

[JumpingIn]

Dispension

If you have the dispensation in place then there shouldn't be any argument with HMRC later on. We generally get agreement for dispensations, although there are a couple of HMRC offices that refuse them on the grounds that you're a PSC (therefore no independent checking procedure in place, unless you can argue that your accountant vouches everything).

If you apply for the dispension using the benchmark scale rates, are you then obliged to apply the subsistence expenses regime for every business trip, or can you choose to switch on occasion to reimbursing actual expenses (with receipts) for the trips where the actual expenses turn out to be higher than the benchmark scale rates?

[Clare@InTouch]

That's really useful information.

I guess that I will be met with howls of derision if I ask if there is anything equivalent for domestic travel?

There are some details here: EIM05231 - Employment income: scale rate expenses: subsistence expenses: table of benchmark scale rates

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

And you can apply for a dispensation, part of which states you want to use those scale rates, here: https://online.hmrc.gov.uk/shortform...ww.hmrc.gov.uk

If you have the dispensation in place then there shouldn't be any argument with HMRC later on. We generally get agreement for dispensations, although there are a couple of HMRC offices that refuse them on the grounds that you're a PSC (therefore no independent checking procedure in place, unless you can argue that your accountant vouches everything).

[Wanderer]

employers may use benchmark rates published on the HMRC website when paying accommodation and subsistence expenses to employees whose duties require them to travel abroad, without the need for the employees to produce expenses receipts.

That's really useful information.

I guess that I will be met with howls of derision if I ask if there is anything equivalent for domestic travel?

[geoffreywhereveryoumaybe]

Likewise

***Just what I was looking for. Thanks***

Thanks ASB that info is really useful.

I am working in Denmark and collect receipts for meals etc but pay myself a £20 a day subsitence allowance to cover breakfast, snacks, coffee etc.

The reason I chose £20 was because a colleague at a recent UK assignment used to pay himself that amount just for commuting by car to his place of work

Now that I see what the permitted rates are for Denmark, I am not stretching the limits in any way.

[Platypus]

Bet you are going to be even more surprised to find I am right

La la la I'm not listening

[harrison]

Perfect

For scale rates:-

Employment income: scale rate expenses payments: accommodation and subsistence payments to employees travelling outside the UK

"HMRC therefore agreed in January 2008 that employers may use benchmark rates published on the HMRC website when paying accommodation and subsistence expenses to employees whose duties require them to travel abroad, without the need for the employees to produce expenses receipts."

"Accommodation and subsistence payments at or below the published rates will not be liable for Income Tax or National Insurance contributions (NIC) for employees who travel abroad, and employers need not include them on forms P11D."

http://www.hmrc.gov.uk/employers/wwsr-bench.pdf

The PIE is in addition.

***Just what I was looking for. Thanks***

[northernladuk]

I'm surprised you say this - laundry is claimable if you're necessarily away from home for weeks at a time.

As a permie when away on business I always claimed meals and laundry (with receipts of course). I do the same now I'm a contractor, MyCo reimburses me.

EDIT. I use actual receipts, not a flat "per diem" rate. I think you have to make a special arrangement with HMRC for that.

Bet you are going to be even more surprised to find I am right

[ASB]

For scale rates:-

Employment income: scale rate expenses payments: accommodation and subsistence payments to employees travelling outside the UK

"HMRC therefore agreed in January 2008 that employers may use benchmark rates published on the HMRC website when paying accommodation and subsistence expenses to employees whose duties require them to travel abroad, without the need for the employees to produce expenses receipts."

"Accommodation and subsistence payments at or below the published rates will not be liable for Income Tax or National Insurance contributions (NIC) for employees who travel abroad, and employers need not include them on forms P11D."

http://www.hmrc.gov.uk/employers/wwsr-bench.pdf

The PIE is in addition.

[LisaContractorUmbrella]

Laundry in these circumstances could be claimed under your personal incidental expenses but laundry per se can only be claimed if it refers to the cleaning of a uniform or specialist work wear

[mudskipper]

You can claim a personal incidental allowance of

• £5 per night for overnight stays anywhere within the UK, and
• £10 per night for overnight stays outside the UK.

without receipts. This is in additional to your 'wholly and exclusively' expenses.

http://www.hmrc.gov.uk/guidance/480_appendix8.pdf