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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Employing people can cause stress for a business owner for many reasons and one of these is payroll. Our teams expect that they will be paid on time and with the correct level of deductions made. We can provide a full payroll service for your business including auto-enrolment, keeping you compliant with your many legal responsibilities.
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The legal and compliance burden put on businesses through the need to submit tax returns and other such documents to strict deadlines is often one of the most stressful elements of running a business.
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