Six years ago HMRC took steps to cut some of this red tape on travel expenses. Since then employers can now pay tax and NI free meal allowances, so called benchmark subsistence payments to employees, and these can be completely ignored for P11D and self-assessment purposes.
The benchmark rates include:
- £5 for breakfast if the business journey starts before 6am
- £5 if the employee spends more than five hours away and buys one meal
- £10 if they’re out for more than ten hours and they buy two meals
- £15 if they are out beyond 8pm and buy an evening meal
Despite inflation running at around 3% per year the rates haven’t increased since they were introduced. The maximum payment per day remains at £25. Paying HMRC’s benchmark subsistence rates reduces your tax admin. Up to £25 per day can paid irrespective of whether the employee spends this on food or not. Whatever they keep is tax and NI free, meaning that it’s a cheap way for you to increase their pay.
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