Guide to HMRC Subsistence Expenses and Allowances

subsistence expenses and allowances

Subsistence expenses and allowances might seem trivial to be counted as business expenses for the purpose of reclaiming VAT or allowances. However, the HMRC provides you tax benefits and allowances for such business expenses.

The business managers can include their expenses on the activities outside the business surrounding. For example, travel expenses, meal expenses or accommodation. These expense allowances are limited to business activities only.

If someone is using these business services as a part of their private activities, then these expenses are not refundable to HMRC.

In this informative read, we will walk you through the subsistence expenses and allowances and how to reclaim them. Moreover, we will discuss how much a business can reclaim subsistence allowance on its business expenses.


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What are Subsistence Expenses?

Subsistence expenses, also known as per diem or per meal expenses, are the expenses incurred to sustain basic business activities. It goes beyond these basic expenses and can extend to other subsistence activities like toll charges, congestion charges, car parking and more.

However, you cannot claim a refund for the following business expenses:

  1. No expense on a meal or beverage has been as they are not bought.
  2. No additional expenditures have been incurred on the meal.
  3. You can claim the “staying with friends or relatives allowance only if the claim is for less than 24 hours.
  4. Meals have been taken to the home.
  5. Meals are provided during a training course, conference or similar activity.
  6. Meals have been included in the overall ticket cost.
  7. Expenses on Alcohol are not counted as business expenses.


Meal Allowance Rates in the UK

The following is the list of the meal rates applicable in the UK for all the travel and meal expenses where a person has been outside the business premises for at least five hours for the purpose of business meetings.

  1. The upper limit is £5 for one meal with a time of five hours ceiling.
  2. The upper limit is £10 for two meals with a time of ten hours ceiling.
  3. The upper limit is £15 for three meals with a time of twelve hours ceiling.
  4. The upper limit is £20 for one meal with a time of five hours ceiling.


What are the Scale Rate Payments?

Checking all your business receipts might be burdensome and requires a lot of effort and time in maintaining a record of every business expense from trivial to larger ones. So, the HMRC introduced the scale rate payments to make the reporting of business allowances convenient and super easy.

Scale rate employments allow employers to issue business cards with a present amount of expenses that their employees can use during their business travels for meals or other expenses. So, it is convenient to record only a single receipt instead of a separate receipt for every travel expense.

For this, you can use the HMRC’s benchmark scale rates. Conversely, you can provide evidence of the typical business expenses and agree with the HMRC’s scale rate.


The Bottom Line

Finally, we can conclude by saying that HMRC subsistence allowances and expenses are reclaimed after providing sufficient evidence of payment receipts at the end of each tax year. Certain business expenses are not VAT reclaimed and cannot be refunded.


Getting subsistence allowance or reclaiming other business expenses might be stressful. AccountingFirms offers you the services of the best tax consultants in the UK.


Disclaimer: All the information provided in this article on Subsistence Expenses and Allowances, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.