I know this crops up quite a bit but could someone point me to where HMRC says eat to live not eat to work as I have a client who goes out for quite a few meals/ buying lunch whilst local. Fair enough when he is out of the area and staying in hotels then that isn't an issue.
Should I be telling my client he shouldn't be claiming or should I leave it to the accountant?
I need to get my facts straight first and get it in black and white if I am to approach him over this.
I don't want him getting in trouble with HMRC and having to pay tax back.
If he is a sole trader and is claiming travel that day then the subsistence is always allowable (assuming the work is not at a regular workplace). If he is trading through a limited company and is claiming for travel then subsistence is always allowable again (assuming that that he is not at his place of work which could be his home, easier to claim travel for employees of Ltd Cos).
If he works from home and buys lunch then this is not allowable.
If he is a sole trader and is claiming travel that day then the subsistence is always allowable (assuming the work is not at a regular workplace). If he is trading through a limited company and is claiming for travel then subsistence is always allowable again (assuming that that he is not at his place of work which could be his home, easier to claim travel for employees of Ltd Cos).
If he works from home and buys lunch then this is not allowable.
sorry Hannah, I have to disagree with "subsistence is always allowable".
There are special rules for long distance lorry drivers so lets exclude them up front.
If someone is (say) a brick layer and goes from site to site thats not a regular place of work but as no definitive regular place of work exists irregular becomes regular so no subsistence is allowable (if you are expected to be itinerant then that is your regular work pattern. For subsistence to be allowable it must be for business only purposes outside of the normal pattern).
If conversely the same brick layer had to stay away from home then subsistence would be allowable.
For limited companies there are changes being implemented in April which may effect the ability of many to claim both travel and subsistence as business expenses where the director is deemed caught under IR35. That could prove very expensive for someone whose contract is reclassified on investigation so I forsee a move away from people travelling or using hotel accomodation.
I think that advice around this area always needs to be accompanied with a financial health warning. Its certainly a question that comes up a lot on here so its obviously very common practice that people believe that the taxpayer is going to compensate their coke and pastie stop on the way the work.
I agree with John, first port of call should be 47705 and the idea is that we must eat to live so in many cases subsistence claims would fail a duality of purpose test.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
My point is that you look at the rules for travel and if the travel is allowable then so is the subsistence. You don't start with the subsistence.
Yes there are always intricacies for lorry drivers and those operating within IR35 so it is always best to obtain bespoke advice.
If the journey is not a regular journey and the taxpayer buys a coke and pastie on the way back then they are allowable (since where the travel is allowable, so is the subsistence).
-- Edited by TaxAdviser on Saturday 23rd of January 2016 04:17:43 PM
No, there are very few cases where the subsistence would be allowable and painting it with a wide brush people will mistakenly read this thread as indication that if the journey is ok then so is subsistence. It isn't.
Excluding the anomalies already considered, think of all of the white van guys, those working in the building trade, sales people, agents, etc. that travel may be to a site / client only once but as travel is an expected part of their work the mileage will be allowable expenditure but subsistence is not.
There is no link between travel being allowable and subsistence.
You don't start with travel and assume that subsistence is ok.
Subsistence payments should be considered an exception rather than a rule.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
The point that you are missing from my replies is the question mark over what is the normal pattern of travel.
A builder/electrician/carpenter/etc. who works at many different sites expects to travel with their work so although their travel may be allowable, subsistence is not.
I'll take your 47705 and raise you www.hmrc.gov.uk/manuals/bimmanual/BIM37660.htm (don't stop at the general commissioners findings, the important part is n justice Templemans conclusions).
That one also emphasises the view that it doesn't come into the equation that it costs more to eat away from the home.
I fear that we are not going to agree on this but, by putting our alternate views at least I know that nobody can read this thread and believe either stance to be an unquestioned statement of truth.
kindest rgeards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
