The new business expenses exemption takes effect from 6 April 2016. These latest regulations define a standard meal allowance for the purpose of the exemption, and are unchanged from the version published for consultation earlier in the year.
The regulations set out the following standard allowances (all of which must relate to ‘qualifying travel’ – i.e travel that itself qualifies as a tax-deductible expense):
“One meal allowance per day paid in respect of one instance of qualifying travel, the amount of which does not exceed—
- £5 where the duration of the qualifying travel in that day is 5 hours or more;
- £10 where the duration of the qualifying travel in that day is 10 hours or more; or
- £25 where the duration of the qualifying travel in that day is 15 hours or more and is ongoing at 8pm.”
An additional allowance of £10 can be paid where a meal allowance is paid under (1) or (2) and the qualifying travel is ongoing at 8pm.
Employers who are considering using these standard meal allowances, or bespoke scale rates, from next April may also wish to keep an eye out for the accompanying HMRC guidance. We are expecting to see this guidance published in the Employment Income Manual soon, and we will be interested to see what further detail it provides on the expense checking requirements for employers when paying such allowances.
It is also worth remembering that the rules around what constitutes ‘qualifying travel’ are under consideration as part of the ongoing review of travel and subsistence. As part of the same review, the Government has also indicated that it is considering removing tax relief for associated ‘day subsistence’ costs. The potential abolition of tax relief for this type of expenditure in future may go some way to explaining why the amounts in these new regulations remain broadly unchanged from those introduced as far back as 2009.