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Audit of meal allowance

If there is no scale rate then allowable meals must be a straightforward reimbursement of actual expenditure.

For scale rate payments – either benchmark or otherwise – there must be an audit which is “regular” and of “sufficient” size.

HMRC expect that the employer will keep sufficient records to be able to demonstrate that the employee is entitled to the scale rate payment, that the employee is engaged in qualifying travel and incurs an expense. The employer must also be able to demonstrate that regular checks are undertaken to ensure that the travel expense rules are being followed.

First of all this means that the employer must be able to prove that the conditions imposed by Sections 336, 337, 338 and 339 ITEPA 2003 do not prevent the expense from being allowable and this means, for example, that the one employment/one workplace rule  is considered at the start of the employment and monitored throughout and that, as a further example, a close watch is made to ensure that the 24 month rule is not broken, particularly if the worker moves between sites that are in close proximity of one another.

Secondly there is the requirement for the employer to inspect documentary evidence and this is the bit that must be “regular” and of “sufficient” size. HMRC will not be more specific but I have managed to pin them down in a couple of instances. The way it works is that the employee keeps the documentary evidence and then every employee is subjected to a random, without prior warning, after the event check. HMRC expect that some form of disciplinary action is taken where an employee is not keeping the documentary evidence.

For more information you will need to contact me.