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Spondoo Accounting
Call for Assistance: 02033 259 341
Spondoo Accounting

PAYING EMPLOYEES FOR FOOD (SUBSISTENCE) COSTS WITHOUT AN INVOICE - HMRC'S SCALE PAYMENTS

January 9, 2023

Under HMRC’s Scale Payments, employers are allowed to pay employees a set amount for meals and other subsistence costs incurred while travelling for work, without the need for invoices or receipts. The amount that can be reimbursed is based on an approved rate set by HMRC.

HMRC has set a limit on the amount that can be claimed for meals and accommodation without providing a receipt. The payments are based on the HMRC’s published benchmark rates, which consider factors such as the location of the trip, distance travelled, the type of accommodation and the time spent away from the usual place of work.

Rates categories

The Scale Payments are divided into two categories: short-term, mid-term and long-term.

  • The employer is permitted to provide a flat-rate payment of up to £5 per day for subsistence costs for brief stays lasting at least five hours.
  • The employer is permitted to provide a flat-rate payment of up to £10 per day for mid-terms stays lasting at least ten hours.
  • The employer is permitted to provide a flat-rate payment of up to £25 per day for longer stays lasting at least fifteen hours.

To be eligible for HMRC’s scale payments, the following criteria need to be met:

  • The employee must be travelling for business purposes
  • The employee must be away from their normal place of work for at least one day
  • The employee must not be reimbursed for any other expenses related to the trip such as travel costs
  • The employer must make sure that the amounts paid are in line with the HMRC’s approved rate.
  • The employee must have incurred actual expenses and kept correct records. When claiming expenses, the employee should provide their employer with a description of the meals taken, the date and time of the meals, the place where the meals were taken and the cost of the meals.

Note

The Scale Payments are subject to change, and employers should ensure that they are familiar with the latest rates before making any payments. Employers should also ensure that they keep records of all subsistence payments made to employees. Employers should also note that the Scale Payments are guidelines only and should not be used as a substitute for providing receipts for meals taken. If an employee is claiming more than the Scale Payments, then a receipt must be provided.

Conclusion

HMRC’s Scale Payments are a reliable and cost-effective solution for employers who need to reimburse employees for subsistence costs. The approved rate set by HMRC is usually lower than the amount that would have to be paid if an invoice or receipt was required, and it eliminates the need for employers to process and store invoices or receipts. By using the Scale Payments, employers can ensure that their employees are reimbursed in a fair and transparent manner, and that HMRC’s rules and regulations are adhered to.

Please reach out to us for further details in case of any enquiries.

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Information provided on the site is merely guidance that may change in line with UK law and regulations. Users must not consider this to be financial advice or their sole resource when making any financial decision. Spondoo is a trading name for Accounting SQL Limited, authorised & license accounting firm under the Institute of Financial Accountants.
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