It’s long been a policy of ours that all employee expense claims (and directors’ expense claims) should be supported by receipts, proving that the relevant expenditure has taken place, and that employee’s claim is for a legitimate business expense. That’s set out in our guide:
Claiming back expenses from your own Limited Company
We don’t need to see every receipt from Pret a Manger for £2.99 sandwiches, but we want the reassurance that you the client make a point of keeping your staff (and yourself) within the rules.
So, here is something that we hadn’t expected, “The Income Tax (Approved Expenses) Regulations 2015” which became law in Dec 2015.
The new regulations give a set of maximum reimbursement rates for meals which will qualify for tax exemption. These come into effect from 6 Apr 2016 and (broadly) apply when the employee is travelling on business.
They are in addition to the cost of the travel and (within limits) do not require supporting receipts. The regulations provide that a sum is calculated and paid or reimbursed in an approved way if it is paid or reimbursed to an employee in respect of meals purchased by the employee in the course of qualifying travel (a ‘meal allowance’).
One meal allowance per day can be paid in respect of one instance of qualifying travel, where that amount does not exceed:
• £5 where the duration is five hours or more;
• £10 where the duration is ten hours or more; or
• £25 where the duration is fifteen hours or more and is ongoing at 8pm.
An additional meal allowance not exceeding £10 per day can be paid in the first two situations where the qualifying travel (in respect of which that allowance is paid) is ongoing at 8pm.
What does this mean?
For a start, it means being away form your normal place of work for “five hours or more” rather than enduring travel of “five hours or more”.
It also means that I am going to continue to keep all my receipts for subsistence and claim the actual amount I incur. That can often be more than £25, given the places where I tend to go and eat. My annual visit, from London to Brighton for dConstruct every September leads to a lot of subsistence costs, so I will continue using what is known as the “receipted basis”, keeping my restaurant receipts and claiming back what I actually spend. If you and your staff want to use the flat rate allowances set out above, then you need to ensure there is a system where travel away from the office is diarised, times are noted and the correct amount is claimed.