No more tax relief for subsistence?

Business meals. The rules allow businesses to pay tax and NI-free sums to directors and employees to cover the cost of meals they buy while on business. However, the government now says that the tax and NI treatment is out of date. It proposes to abolish the relief, with the exception of payments for meals where an overnight stay is involved, which it says it will review later. The change could mean additional costs for some employers.

Higher costs. If the government gets its way, any sums you pay employees for meals will be liable to tax and NI (employers’ and employees’) leaving them worse off than under the current rules. Consequently they might expect, or even be contractually entitled to ask, you to make up the shortfall. This would add between 67% and 115% to the cost of paying your employees’ subsistence.

Consultation. The proposal is not yet a certainty, it’s just on the government’s wish list. It has issued a consultation paper on travel and subsistence payments asking for feedback by 16 December 2015. We think this is one consultation that deserves a response, especially if yours is a business which potentially faces higher costs if the government’s proposal becomes law.

The government has issued a consultation paper indicating that it wants to withdraw tax-free subsistence payments for workers. This would lead to extra costs for some employers. You have until 16 December 2015 to respond to the consultation.
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