Subsistence Rates (Benchmark Rates) Explained

Subsistence Rates (Benchmark Rates) – made simple!
On 6th April 2009, HMRC introduced a scheme that allowed payment of tax-free subsistence to employees travelling on business. To use the scheme you had to notify HMRC first, but since 6th April 2016 that is not necessary. From this date a system of benchmark rates came into force which are set out in regulations. The rates are set as follows:
Minimum journey time
Maximum amount of meal allowance
5 hours
10 hours
15 hours

We have created several posts surrounding Tax Rates for further reading here.

Where an allowance of £5 or £10 is paid and the qualifying journey lasts beyond 8.00pm a supplementary rate of £10 can be paid. A maximum of two allowances can be paid for each day.
HMRC can agree higher flat-rate subsistence payments with employers on request and evidence that they are reasonable and required taking account of the employees’ duties.

Subsistence Rates: Incidental overnight expenses

Employers can pay employees a tax and NI-free amount to cover personal costs they incur when staying overnight on a business trip, e.g. hotel charges for newspapers or laundry. The maximum payments are:
  • £5 per night for travel within the UK
  • £10 per night for travel outside of the UK

For more information, we provide a Business Consultation to ensure our clients benefits from tax planning and accounting matters.

For any assistance contact Companies999, we will be happy to help you!

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