Meal expenses – update

It’s a couple of years since I posted here about meal expenses, so a small update is probably due – particularly given the inflationary leap that we’ve seen over the past couple of years.

Prior to 2016, HMRC had a published tariff of what they regarded as a reasonable set of expense rates for meals. That link also gives helpful advice on what circumstances they treat it as acceptable for you to treat a meal as a business expense (either as a Sole Trader treating a meal receipt as a business expense that reduces taxable profit or as an employer who accepts an expense claim from an employee).

More recent guidance says that, as a self-employed person, you can claim “reasonable” costs of food and drink when you’re traveling for business.

As far as I can see, HMRC doesn’t define ‘reasonable’, but doing a bit of detective work and using a bit of common sense, a non-lavish meal in a High Street eatery is probably OK as a benchmark. I did look at other areas – where they have guidance on subsidised meals – that it can’t be “elaborate meals with fine wines.”

To be clear, that line is from different guidance but I’d say that it helps us understand the mind of HMRC on this matter.

Since 2016, the old, prescriptive, figures look very mean, given the inflation that we have seen over the past two years. The 2016 rates were….

  • Breakfast rate – £5
  • One meal (on a day where you’re away from home/normal workplace for at least 5 hours) rate – £5
  • Two meals (on a day where you’re away from home/normal workplace for at least 10 hours) rate £10
  • Late evening meal rate £15

I’d suggest that anyone negotiating these agreed rates with an employer would be able to justify adding between 30% and 40% to those figures today (general purchases cost 30.5% more now than they did in 2016 if you use CPI inflation in the calculation, or 40% more if you use RPI).

So it may make sense to be asking for at least £7 to cover breakfast, £14 to cover a day when you’re away for 10 hours, and £21 if you aren’t able to get home at a reasonable time and need to eat out in the evening. This would be a very modest rate and I know that a lot of employers have negotiated much better ‘Scale Rates’ than that with HMRC.

Either way, when negotiating, make sure you share your reasoning with the employer and make sure that they’re clear about what they regard as acceptable.

Update: To further complicate this, my colleague Emily has sent me this link to the HMRC website. I’ve not fully processed it yet and worked out how it differs from the other Employment Income Manual linked to – above – but it’s worth looking at if you are advising on this matter.

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