Meal Allowance

[sapper]

If your company decides to give you a daily meal allowance, I'm not sure what the tax free limits are, do they get any tax relief on it, or do they bear the costs themselves.?

Sapper

[Roymondo]

If your company decides to give you a daily meal allowance, I'm not sure what the tax free limits are, do they get any tax relief on it, or do they bear the costs themselves.?

Sapper

The company bears the cost regardless of Income Tax relief.

The main reason e.g. Stobarts operate such schemes is that the employees like it as it reduces the amount of income tax they pay by moving roughly £3k5 (assuming it is paid at £15 a day) of their gross pay outside the scope of income tax and NI. At first sight it makes no difference to the company whether they pay their drivers £35k as salary or £31k5 salary + £3k5 meal allowance but the drivers are happy as it increases their take-home by over £700 a year. Look a bit further though and the company benefits because the employee's pensionable pay is less - which reduces the compulsory employer pension contributions (as well as the amount of Employer NI contributions, of course). For hourly paid drivers it also has the effect of reducing their hourly rate - which is another benefit to the company.

HMRC set "benchmark" rates for meal allowances, or companies can reach a "bespoke agreement" to pay more.

[sapper]

Cheers Roymondo.
Sapper

[coiler]

If your company decides to give you a daily meal allowance, I'm not sure what the tax free limits are, do they get any tax relief on it, or do they bear the costs themselves.?

Sapper

See the following guidance

https://www.gov.uk/hmrc-internal-manual ... l/eim66205

I pay a meal allowance of £5 a day if they’re away from home base for over 5 hours, and there is no checking of receipts or expenditure, just that they were away for over 5 hours, which can be checked using a tracker.

The cost comes from the employer, but there is no tax or NI to pay on it.



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[markqpr]

If your company decides to give you a daily meal allowance, I'm not sure what the tax free limits are, do they get any tax relief on it, or do they bear the costs themselves.?

Sapper

Depends if you're a fat POM, Scammel op or a crane god