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Meal Allowances

The following is the text of an article published on Shout99

Meal Allowances 

Why should anyone be able to claim for meals? We all have to eat so why should the government subsidise that expense? How can the consumption of a meal be a legitimate cost of earning a taxable income? We do eat on our days off so why should it be the case that anyone can claim for meals when they are working? The bottom line is that we eat in order to live and not in order to work so why tax free meal allowances? 

This is one of the more confusing areas of travel expenses and the purpose of this article is to reveal the truth behind what can be claimed – and why. 

The general test for an expense is that it must be incurred wholly, exclusively and necessarily in performing the duties of the employment. This is a very tough test and in respect of meals it is not passed simply because we eat in order to live and not in order to work. However, for those who travel in the performance of the duties a deduction is allowed for those travel expenses necessarily incurred. For those who travel to temporary workplaces and provided the journey qualifies, a deduction is allowed for travel expenses in respect of necessary attendance at the workplace.

The cost of travel is not just the cost of the journey. Travel costs include necessary subsistence and on the assumption that the journey qualifies there is an argument that the purchase of a meal is an expense of travel. What you must still bear in mind is that we have to eat in order to live so consider the question – is there a genuine argument that the cost of the meal is a cost of travel? The answer is that there is a genuine argument but only if the cost of the meal is an extra expense. So the question is whether it is the travel that has caused the employee to incur an extra expense in purchasing a meal. 

I keep referring to the extra expense simply because we must incur an expense in order to live BUT if a genuine business journey results in the purchase of a meal at a higher cost than would otherwise have been the case the extra expense could justify a claim for meal allowance. 

There is no extra expense if a person takes a packed lunch from home. HMRC will also argue that there is no extra expense if the person prepares their own sandwiches either at the workplace or at the accommodation if the person is working away from home. In these circumstances the expense is incurred in order to live. It is not an extra expense attributable to travel. It is important to note that HMRC literature refers to the purchase of a meal. HMRC will not accept that the purchase of ingredients will qualify as the purchase of a meal. They will not grant a dispensation in that respect and they will not accept such a claim from an individual. It is the view of HMRC that it is a meal that must be purchased. 

“Extra” expense 

If a person has a permanent workplace and is working away on a temporary assignment the extra expense is compared with the cost that would have been incurred at the permanent workplace. If the permanent workplace is in an expensive area the cost of the meal at the temporary workplace could very well be lower and if that is the case then there is no extra cost and consequently no allowance.

If a person does not have a permanent workplace but works at a series of temporary workplaces the cost of the meal is compared with home.

It is the extra expense that is allowable but in practice it is not possible to identify the amount of extra expense so where it can be identified that extra expense has been incurred HMRC will allow the full amount of the expense.   

Common fallacy 

It is a common fallacy that if you are away for more than a few hours you are entitled to a meal allowance as a matter of right. That is not the case. You must purchase a meal and incur extra expense. It is true that there is a time guideline as in “over 5 hours one meal – over 10 hours two meals” but an extra expense must be incurred.  If a person is away for 11 hours spending 90 minutes driving each way and working an 8 hour day with a 30 minute break for lunch during which one meal is purchased any entitlement is limited to that one meal. For the two meal rate to apply two meals must be purchased and must be part of the cost of the journey. It is not acceptable to purchase a meal en route home and consume the same at your own dining table. 

Evidence/Scale Rates/Benchmark Rates 

Employees who claim direct to HMRC on their self assessment form must retain evidence. 

Employers, for example umbrellas, must have an adequate audit trail even if they are using the benchmark rates. It used to be the case that HMRC accepted scale rate payments without evidence of the purchase of a meal but that is no longer the case. HMRC expect that sufficient controls are in place to ensure that the employee is actually purchasing a meal and that means the employee retaining evidence, the employer making regular random checks and maintaining adequate records of the audit trail. Failure to do so could result in the dispensation being withdrawn and payment to HMRC of the tax lost.