Article Summary
This guidance note provides an overview of the tax treatment of subsistence expenses incurred by employees when travelling for work. Subsistence covers costs like accommodation and meals when an employee has to stay away from home overnight for business. The note explains that subsistence costs can be allowable expenses for tax purposes if the associated travel meets either of two tests - that it was necessarily incurred in performing the employee's duties, or that it was for necessary attendance at a particular place for work. It outlines when subsistence expenses while travelling are deductible, including during overnight stays or extended periods working away from home. It also covers how reimbursements should be handled, including using HMRC benchmark scale rates. Salary sacrifice arrangements are highlighted as not qualifying for the normal tax exemptions.Recent consultations have confirmed the current regime will remain, despite reviewing its suitability for modern working. This provides helpful certainty for employers and employees regarding the tax treatment of subsistence costs.As a tax professional, being familiar with these rules will help you ensure your organisation applies them correctly. This guidance provides a useful reference covering when subsistence expenses can be claimed and how they should be reimbursed.