Claiming subsistence allowance in the UK

If you travel for business as an employee or self-employed entrepreneur, the chances are that you will incur travel costs, meals and accommodation during your job. As an employee or self-employed, you may be entitled to claim subsistence allowance for these business-related expenses.

What is included in subsistence allowance

Subsistence allowances cover business travel expenses, including accommodation, meals, and incidental costs. If you are self-employed, the distinction between these expenses is incredibly important as it allows you to categorise them as business expenses, making them eligible for tax relief.

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When to claim subsistence allowance

The HMRC has laid out clear stipulations on the conditions that employees and the self-employed must satisfy to claim subsistence allowance. Based on their guidelines, you may claim subsistence allowance if the following apply:

• The business expense is necessary and arises as a result of the performance of your duties as an employee
• The expense incurred is reasonable and is additional to the employee’s normal expenses
• You can verify your claim with receipts
• The costs are incurred whilst away from your regular place of work

Exemptions from claiming the allowance

Similarly, there are certain conditions that exempt employees from claiming a subsistence allowance. You cannot claim subsistence allowances if either:

• The meal does not constitute an additional expenditure
• You have already claimed the “staying with friends or relatives allowance”
• The meals are provided during a training course, conference or similar activity
• Your meals are provided and included in the plane or train travel ticket cost
• A meal or drink has not been bought

Subsistence scale rates

HMRC recommends scale rates to businesses and employers if they incur certain business expenses regularly or uniformly. According to HMRC, scale rate payments apply if employers provide employees with a set amount of cash to pay for some common business expenses like travel and meals.

Setting up scale rates

Employers can set up scale rates with HMRC using either of 2 methods:

• Using HMRC’s published benchmark scale rates for subsistence allowances
• Working with HMRC to agree on a set scale rate based on evidence of typical expenses. 

Reporting scale rates

While employers typically do not need to check or verify every receipt by an employee, they must check a sample of them by following HMRC sampling guidelines. Therefore, if your employer uses scale rates in their subsistence allowances, you still need to keep and provide them with receipts.

Your employer will report the scale rate payments you receive each year on the P11D form filed annually. Scale rate payments are not subject to tax or National Insurance, so you will not be charged any additional tax when this is done.

Domestic subsistence allowance rates

HMRC publishes recommended subsistence rates for local business travel within the UK annually. Your employer will decide whether to reimburse you using these rates or negotiate a bespoke rate with HMRC based on historical travel costs.

Learn more about specific travel-related expenses when travelling for business.

Domestic meal subsistence rates

Domestic accommodation rates

Overseas subsistence allowance rates

If you travel internationally for business as an employee, the table below shows the subsistence rates in local currency for some of the more popular travel destinations.

Full details on HMRC’s meal and room rates for individual countries and cities can be found here.

Claiming subsistence allowance as self-employed

Self-employed people can claim back any business expenses incurred on their tax return each year. This includes the cost of food and drink as subsistence if you can prove it is a genuine business expense.

If you are travelling for business, the HMRC has prescribed self-employed daily food allowance rates for those who meet the following conditions:

• It is an overnight business trip
• The location is not a regular place of travel for your business operations
• The expenses being reclaimed on food and drinks are incurred during your business travel

HMRC’s advisory benchmark scale rates include:

Breakfast rates
A standard rate of £5 applies if you leave the house earlier than usual (before 6 a.m.).

One meal rate (5-hour rate)
A standard rate of £5 is recommended if you are away from your normal place of work for over 5 hours.

Two meal rate (10-hour rate)
A standard rate of £10 is applicable if you are away from home/ your normal place of work for at least 10 hours.

Late evening meal rate
A rate of up to £15 if you have to work later than your usual working hours.

Keep receipts of any food and drink expenses for the period you reclaim them. You can also claim other business expenses such as travel (trains, parking, bus fares and fuel). If you want to reclaim fuel expenses, keep a mileage log to claim mileage allowance relief from the HMRC.

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