Subsistence Allowance

Subsistence is the tax term for food and drink. It also often refers to the costs of accommodation and incidental overnight expenses.

 

 

Self-employed

Sole traders and partners can claim tax relief for subsistence if the expenditure is incurred as:

  • Business travel or an overnight business trip
  • ‘Itinerant’ trade wherein you trade from one location to another

Travel to the destination where it is outside the normal pattern of travel

 

Companies And Employees

Company owners and employees can claim tax relief for subsistence if the expenditure is incurred with business travel or an overnight business trip.

  • You can claim daily fixed rate deductions according to HMRC scale rate, but only limited to 3 meal rates on one day or 24-hour period.
    • Breakfast rate – up to £5
      • This rate may be paid where you leave home earlier than usual and before 6am. This will not apply if you usually leave work before 6am.
    • One meal (5 hour) rate – up to £5
      • This rate may be paid if you have been undertaking qualifying travel for a period of at least 5 hours.
    • Two meals (10 hour) rate – up to £10
      • This rate may be paid if you have been undertaking qualifying travel for a period of at least 10 hours.
    • Late evening meal rate – up to £15
      • This rate may be paid where you have been working later than 8pm. This is will not apply if you usually work after 8pm.
  • The company or your employer may reimburse your for costs incurred according to their own policy. However:
    • if you are not reimbursed as an employee, you will have to make a claim on your tax return for a deduction for tax purposes on the basis that the expense was part of travel costs incurred in performance of your duties.

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