Keeping receipts for sandwiches, coffees and meals whilst away on business can be a messy affair. Although if you’re using Xero and HubDoc, it’s certainly easier than it used to be.
But is there a simplified way to make sure you claim what you’re entitled to, while still taking advantage of the tax relief available?
This guide explains what you can claim for in terms of meals and subsistence when working away from your normal place of work.
When can you claim subsistence?
You can claim subsistence if all of the following conditions are satisfied:
- You are travelling for business purposes
- You are away from your normal place of work (not ordinary commuting)
- You incur extra costs that you would not normally incur
Typical examples include client meetings, site visits, temporary workplaces and attending training courses.
You cannot claim if:
- The journey is normal commuting (to or from your main place of work)
- You eat at home
- Meals are provided free of charge
- No additional cost was incurred
HMRC benchmark scale rates
HMRC provides ‘benchmark scale rates’, which allow you to claim fixed amounts without needing to produce receipts.
If you have receipts and the actual cost exceeds the scale rate, you may instead claim the full cost using the receipt. However, if you want to reclaim VAT, a valid VAT receipt is essential.
If you choose to use the benchmark scale rates instead of actual receipts, there will be no VAT to recover. The scale rate amount will still be recorded as a business expense under travel and subsistence, reducing your company’s corporation tax liability. There will also be no income tax charge on the director or employee.
Meal allowances – benchmark rates
The scale rate depends on how long you are away from your normal workplace:
- More than 5 hours – £5
- More than 10 hours – £10
- More than 15 hours – £25
The late evening allowance
If you are still travelling or working after 8pm, you may claim an additional £10 evening meal allowance.
However, the combined meal allowance and late evening allowance must not exceed the 15-hour cap of £25.
The breakfast allowance
You may claim up to £5 for breakfast if:
- You leave home before 6am
- You purchase breakfast away from home
- The cost arises solely because of business travel
This breakfast allowance is separate from and in addition to the £25 daily meal cap.
Overnight incidental expenses
If you stay away overnight for business purposes, you may claim:
- £5 per night in the UK
- £10 per night when overseas
These amounts cover small personal expenses such as laundry, phone calls, tips and toiletries. No receipt is required, although evidence of the overnight business trip should be retained (for example, a hotel invoice in the company’s name).
Keeping receipts
When using benchmark rates for meals, breakfast allowances and incidental overnight expenses, no receipts are required. However, you must still retain evidence of the business journey.
If claiming actual costs in excess of benchmark rates, receipts are required. And if you intend to reclaim VAT, VAT receipts are essential.
Are there special rules for directors?
No. Directors may claim under the same rules as employees, provided the travel is a genuine business journey away from the normal workplace.
Record-keeping requirements
Always record:
- The date(s) of the business journey
- The destination
- The purpose of the trip
- The time you left and returned
- The type and amount of expenses claimed
EBA has prepared a spreadsheet to make it easier to record journeys where you intend to use HMRC’s benchmark scale rates. Only complete the spreadsheet where you are not claiming actual receipts for the same expense.
If you would like a copy of the spreadsheet, please contact your account manager.
Examples of how the limits work together
Example 1
You leave for a business trip at 5:45am and return at 12 noon.
This is a 6.25-hour trip.
You may claim:
- £5 meal allowance (more than 5 hours)
- £5 breakfast allowance (left before 6am)
Total claim: £10.
Example 2
You leave at 5:45am, stay overnight in the UK and return at 9pm the following evening.
Day one:
- £5 breakfast allowance
- £25 meal allowance (more than 15 hours)
- £5 overnight incidental allowance
You cannot claim the late evening allowance because the £25 meal allowance already reaches the cap.
Day two:
- £25 meal allowance (more than 15 hours)
Total claim: £60, with no receipts required.
Example 3
You leave at 10:30am and return at 9pm the same evening.
- £10 meal allowance (more than 10 hours)
- £10 late evening allowance (after 8pm)
Total claim: £20. No overnight allowance applies.
Common missed claims
Directors often overlook legitimate claims such as:
- Breakfast on early starts
- Evening meals after late meetings
- Meals during long site visits
- Overnight incidental expenses
The bottom line
Using the subsistence spreadsheet helps ensure that you never miss out on claiming what you are entitled to.
As with mileage claims, we rely on you recording journeys accurately and sending the information to your account manager so we can reflect the claims correctly in your accounting records.
If you would like a copy of the spreadsheet or have any questions about how to use it, please contact your account manager.
