Scale subsistence rates
HMRC has now introduced an advisory system of 'benchmark' scale rates which employers can use to make subsistence payments to employees free of tax and NICs. The new advisory system was implemented from 6 April 2009.
The system only covers scale rates for day subsistence payments. There are detailed requirements on notifications and conditions but once set up the following tax payments can be paid, tax free and with no P11D reporting obligations:
Breakfast rate for irregular early starters up to £5.00 per day
One meal (5 hour) rate - up to £5.00 may be paid
Two meal (10 hour) rate – up to £10.00 may be paid
For further details see www.hmrc.gov.uk/briefs/income-tax/brief2409.htm.
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Cathy Corns is a Corporate Tax partner at Mercer & Hole.
Date: 1st May, 2009
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