There are a number of perks that come with working away such as greater flexibility and the opportunity to explore new towns, cities and even countries. Working away however, does also mean you are away from home and therefore of course, need to pay for your food and drink. But, whose responsibility is it to foot the bill? 

If you have to travel for work, you may be able to claim tax relief on the cost or, money that you have spent on things such as overnight expenses and food. It is possible to claim tax relief on things such as; 

  • Public transport costs 
  • Hotel accommodation 
  • Food and drink 
  • Parking fees
  • Business calls

Meal allowance rates or, scale rate payments as the HMRC refer to them as, are a way to assign a set amount of money that you can spend on food for each day, on each travel away. The HMRC has suggested specific amounts for travel to different locations worldwide. 

Why are such rates important? 

Business expenses are not subject to tax or national insurance fees so, if you can show that the money you have spent on food and drink whilst away for work was a business expense, you may save on tax and national insurance payments yearly. 

The two forms of scale rate payments 

Businesses have two ways of offering their employees per diems free tax. Per diem is a daily allowance of a specified set of money to cover living expenses, travel and food when working away. 

If you travel a lot, you may agree a on a custom scale rate with the HMRC directly and if you are successful, you may be able to offer higher rates to your employees than what is usual. For a custom scale rate however, you do need to prove that your travel expenses are typically higher than allowed. 

If you do not create a custom scale rate, you can use the scale rates provided for meal allowances. These are standardised depending on the locations visited and reflect that countries vary in cost. 

An example: you travel to Paris for a work trip, if you were there for 5 hours, you could be entitled to 40 euros, 10 hours, 86.50 euros and 24 hours, 117 euros plus room rate. Therefore, if you were away for work in Paris for three days, you could claim expenses back for 351 euros plus room rates.

You can also view the full list here. 

When do the rates apply?

These rates are designed to help with travel expenses, this means that there are some conditions set in place by the HMRC for when they apply. Scale rates must apply when the following conditions are met, the qualifying conditions are: 

  • The travel must be in performance of an employees duties or to a temporary place of work 
  • The employee must be absent from their normal place of work for a continuous period, in excess of five or ten hours 
  • The employee should have incurred the cost of food and drink after starting their journey 

What happens if you go over your scale rate 

If you keep your spend within the scale rate, it is tax free. If you go over, anything additional is subject to tax. Some businesses may choose to allow employees to go over these limits however, they will have to pay tax each time this happens. 

For support or advice with any aspect of your business finances, please don’t hesitate to get in touch with the Cooper Accounting team, we would be more than happy to help.