The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
Rates are set as follows:
Minimum journey time
Maximum amount of meal allowance
5 Hours 10 Hours
£5
£10 £25
15 Hours (and ongoing at 8pm)
Where a scale rate of £5 or £10 is paid and the qualifying journey in respect of which it is paid lasts beyond 8pm a supplementary rate of £10 can be paid to cover the additional expenses necessarily incurred as a result of working late. A meal is defined as a combination of food and drink and would take a normal dictionary meaning. Where employees are required to start early or finish late on a regular basis, the over 5 hour and 10 hour rate, whichever is applicable, can be paid provided that all the other qualifying conditions are satisfied. Qualifying conditions - Benchmark scale rates must only be used where all the qualifying conditions are met. The qualifying conditions are: the travel must be in the performance of an employee’s duties or to a temporary place of work, on a journey that is not substantially ordinary commuting. the employee should be absent from his normal place of work or home for a continuous period in excess of five hours or ten hours. the employee should have incurred a cost on a meal (food and drink) after starting the journey and retained appropriate evidence of their expenditure. Employers can pay less than the published rates. If an employer pays less than the published rates, employees cannot claim tax relief on the difference, but if they spend more on expenses than the amount that is reimbursed they can still claim a deduction from HMRC for the difference between what they actually spent on the expense and the amount reimbursed by their employer in the normal manner, subject to their having retained appropriate evidence. If a higher amount is paid without agreeing a bespoke scale rate with HMRC, the excess should be subject to tax and NICs. An employee can only be reimbursed for a meal once. If the cost of an evening meal or breakfast is reimbursed on an actual basis, because it is included in the cost of an overnight stay, the employee would not also be entitled to a benchmark rate in respect of those meals. It is a condition of the Income Tax (Approved Expenses) Regulations that employers using the benchmark scale rates to pay or reimburse their employees that they have an appropriate checking system in place to ensure that payments are only made on qualifying occasions. See EIM30270 . Working Rule Agreements – The published scale rates do not apply to employees covered by Working Rule Agreements, for which separate specific rates are already set for particular occupations. See EIM71300 . Overnight accommodation rate - A benchmark rate has not been set for overnight accommodation costs. Employers wishing to agree a rate with HMRC for overnight accommodation will need to apply using the bespoke rate process. See EIM30250 . Overnight subsistence rate - The over 15 hour rate for subsistence will almost always apply where an employee is required to stay away overnight, provided the cost of any meals is not also included in an accommodation payment. Staying with friends and family rate - A rate has not been set for a scale rate payment for staying with friends and family. The travel rules still apply to actual costs of subsistence incurred while staying with friends and family. See EIM30073 .
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