Daily subsistence is the tax term for food and drink, but it also includes other expenses. Find out more!
(3 minute read)
We will cover:
- What can be claimed as daily subsistence
- What are the conditions for claiming subsistence allowance
Daily subsistence: What is it?
Subsistence is the tax term for food and drink, but it can also apply for accommodation expenses.
Daily subsistence applies to travelling expenses, such as when an employee goes on a business trip.
Employers can claim back their tax if their business travel expenses are within limits.
How much can I spend on daily subsistence?
To know how much you can spend on a business trip per day, there are fixed per diem rates set by the HMRC.
You can only claim subsistence if it applies to a business travel. There are also other factors, which are mentioned below.
The key point to remember is that business expenses are not subject to tax or National Insurance fees, so it’s worth claiming tax back.
There are two options to determine how much daily subsistence to spend:
- Employers agree on their own budget to HMRC
- Employees spend within the fixed rates already set by HMRC
These rates include maximum spending limits as well as minimum travel times which exceed working hours. They also vary depending on location and, of course, type of spending.
For example, the National Meal Allowance in the UK is currently…
|Minimum journey times||Meal allowance maximum amount|
|15 hours (and ongoing at 8PM)||£25|
The above rates can also be called scale rate payments, subsistence expenses or per diem.
HMRC also has a list of the different daily subsistence rates for each country and main city for business travel.
These rates vary every year, so make sure you stay within limits if you want to claim subsistence allowance, as if you go over the budget, tax is applicable.
What are the other conditions to claim daily subsistence?
If employees travel often, it’s easier to set an amount for food and accommodation expenses as a rule rather than on a case-by-case basis. This ensures you monitor business travel spendings to claim back tax.
But what other conditions do you need to meet to claim subsistence?
As mentioned previously, daily subsistence claims apply only to business travel expenses. Therefore, make sure to monitor these closely, and keep receipts of at least one transaction such as a meal receipt to work out your budget.
The budgets ensure that daily subsistence is within reasonable limits to HMRC. Another condition you need to meet is that your occupation or trade is ‘itinerant’.
‘Itinerant’ means being on the move. In other words, if your work requires you to travel. For example, a lorry or cab driver, or a travelling salesman are examples of itinerant occupations.
However, the trips must not form part of a regular pattern. For example, a visiting lecturer who travels once or twice a week around the UK has a regular pattern of travel. If she was to travel a few times a year (in other words, occasionally) she might be able to claim daily subsistence.
We hope this article helped you understand about daily subsistence. If you need further help with tax advice, do not hesitate to contact us.
For more information related to self-assessment tax reclaims, please visit My Tax Rebate.
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