Food expenses

[bitwrx]

If an employer offered its employees - who are working away from their home office for a few months at a time - an allowance of up to a certain amount per month 'for food' (on top of receipted expenses for accommodation and travel), what would be the significance of the word 'food'?

I understand food expenses are (income??) tax exempt, but other types of expense aren't. What would be the implications for the employee and employer if:

1. The employee spent a food allowance on non food items of his/her own accord?
2. The employer told the employee to recover non-food costs using the 'food' allowance?

I'm interested in the letter of the law as much as practical implications.

Thanks in advance.

PS links to relevant sections of hmrc would be greatly appreciated.

[LC23]

Where employees are working at a temporary workplace (and it does need to be confirmed that the workplace is temporary) then food can be reimbursed as a tax free expense by the employer. This includes meals purchased at restaurants/take aways etc. as well as supermarket food. Receipts must be kept and expenses claimed based on these.

If the employer would prefer just to pay a round sum allowance to cover these costs then this amount must be agreed with HMRC and included in the Dispensation if it is to be paid Tax and NIC free. HMRC would usually expect the employer to carry out a survey to justify the round sum amount they wish to pay.

Otherwise it must be paid via payroll and individuals can make a claim on their tax return by keeping their receipts and claiming for these amounts. This does still mean that NIC has been paid on the allowance however.

http://www.hmrc.gov.uk/incometax/relief-travel.htm

http://www.hmrc.gov.uk/helpsheets/490.htm

http://www.hmrc.gov.uk/manuals/eimanual/EIM30073.h...

Edited by LC23 on Wednesday 27th October 19:09

[Dupont666]

We used to do it all the time when on training courses away from home and living out of hotels for a week or two...

It was £30 for food and £5 for non food (newspapers, etc)...

The reason they say food is that alcohol is not allowed at all, maybe it was just my company that wouldnt allow it, all we might of done was offer a larger than average tip to the waiter to put it down as food instead of booze on the reciept so we could claim it all back.

Those were fun days...

[Kermit power]

Dupont666 said:

We used to do it all the time when on training courses away from home and living out of hotels for a week or two...

It was £30 for food and £5 for non food (newspapers, etc)...

The reason they say food is that alcohol is not allowed at all, maybe it was just my company that wouldnt allow it, all we might of done was offer a larger than average tip to the waiter to put it down as food instead of booze on the reciept so we could claim it all back.

Those were fun days...

That sounds like a receipted expense claim with a maximum limit though, which isn't the same as a daily allowance.

I have to claim back individual meals if I'm travelling in the UK, but get an HMRC-agreed fixed per diem allowance if I'm overseas, which varies by country. The best has always been Paris. The daily allowance there is €68. When I was travelling regularly, I used to be able to do breakfast for €2, lunch for €6 and dinner for €15.

Put that another way, €225 a week extra cash in hand, tax free. I did once check, but there wasn't a facility to claim less than the full daily allowance.

[fido]

I used to get $100 per day maximum allowance when going to the States - it was strictly for breakfast, lunch and supper (including a non-alcoholic beverage). Of course i max'd it out on every occasion and got a few raised eyebrows when it was signed off .. bit like those MP expenses i suppose - it's meant to put you in a situation so that you are no worse than before! Thing is, i always have a $40 rare tuna steak for breakfast when i'm in London so what's the problem?

[Kermit power]

fido said:

I used to get $100 per day maximum allowance when going to the States - it was strictly for breakfast, lunch and supper (including a non-alcoholic beverage). Of course i max'd it out on every occasion and got a few raised eyebrows when it was signed off .. bit like those MP expenses i suppose - it's meant to put you in a situation so that you are no worse than before! Thing is, i always have a $40 rare tuna steak for breakfast when i'm in London so what's the problem?

Again, though, that's receipted expense claims, not a daily allowance. If you're on a daily allowance as far as the tax man is concerned, then you will be getting an agreed amount regardless of whether you spend more or less than that amount, and won't be submitting receipts to claim it.

The only exception to the above that I know of is a reduction of a certain percent where you are claiming for a meal over and above normal (eg, dinner with a customer).

[Nickelson23]

Mine is £20 a night food if outside London. Also one alcoholic drink is permitted.