A world away from Westminster and MPs’ generous food allowances, the rest of the working population – and their employees – have a new set of rates for claiming the cost of breakfast, lunch and dinner.
The numbers are certainly neat - £5 for breakfast, £5 for a meal, £10 for two and £15 for an evening meal. Whilst that all sounds like a particularly simple and to the point advertising board outside a pub or greasy spoon, as with complicated recipes it pays to examine the full list of ingredients before you begin.
The new 'benchmark rates' for subsistence payments on meals were introduced by HMRC from 6 April 2009. The rules refer to 'meals' as food and drink – and do not cover drinks taken alone. Within the rules, payments reimbursed up to certain maximum rates are free of tax and NIC. The rates are intended to save employers the burden of sampling expense payments when seeking to agree levels of such payments to be covered by a dispensation.
The rates will be accepted for all employers as long as the employee has incurred subsistence expenses while travelling on an allowable business journey to a temporary place of employment causing absence over given minimum periods. Employers simply notify HMRC of their intention to apply the rates by ticking the appropriate statement/box under 'Travel and Subsistence' on form P11DX before starting to use the system.
The rates are:
- Up to £5 on breakfast for irregular early starters where the worker leaves home earlier than usual and before 6am and incurs a cost on breakfast taken away from home. This does not cover workers on early shifts
- One meal rate of up to £5 where the worker has been away from his or her home/normal place of work for a period of at least five hours and has incurred a cost on a meal
- Two meal rate (ten hour rate) of up to £10 where the worker has been away from his or her home/normal place of work for a period of at least ten hours and has incurred a cost on a meal or meals
- Late evening meal rate (irregular late finishers only) of up to £15 where the employee has to work later than usual, finishes work after 8pm having worked a normal day and has to buy a meal which he or she would usually have at home.
Early risers who fancy breakfast on the boss every day are out of luck. The early and late rate payments are exceptional – not for regular occurrences. The hours qualifications must be met and the payments must be reimbursements, not a tax free allowance.
Employers must have adequate management processes in place to ensure that payments are only made where all the qualifying conditions are met.
Further information: Revenue & Customs Brief 24/09 http://www.hmrc.gov.uk/briefs/income-tax/brief2409.htm