Benchmark Scale Rates
Rates for subsistence payments
HM Revenue & Customs are implementing a new benchmark system whereby they have set advisory rates for various subsistence payments from 6 April 2009. Employers will be able to pay subsistence payments up to the scale rate tax free to its employees without agreeing them with HM Revenue & Customs. The system is optional for the employer but may be worth considering.
To use the new scale rates the employer must apply for a dispensation by ticking the appropriate statement under travel and subsistence on form P11DX.
The benchmark scale rates that apply from 6 April 2009 are as follows:
- Breakfast rate £5
- One meal (5 hour) rate £5
- Two meal (10 hour) rate £10
- Late evening meal rate £15
Breakfast rate – The rate may be paid where an employee leaves home earlier than usual and before 6.00 am and incurs a cost on breakfast taken away from his home after the qualifying journey has started. If an employee usually leaves before 6.00 am the breakfast rate does not apply.
Late evening meal rate – The rate may be paid where the employee has to work later than usual, finishes work after 8.00 pm having worked his normal day and has to buy a meal before the qualifying journey ends which he would usually have at home.
The breakfast and late evening meal rates are for use in exceptional circumstances only and are not intended for employees with regular early or late work patterns (see examples at EIM05232).
One meal (5 hour) rate – The rate may be paid where the employee has been undertaking qualifying travel for a period of at least 5 hours and has incurred the cost of a meal.
Two meal (10 hour) rate – The rate may be paid where the employee has been undertaking qualifying travel for a period of at least 10 hours and has incurred the cost of a meal or meals.
Benchmark scale rate payments must be limited to three meal rates on one day or 24 hour period. A meal is defined as a combination of food and drink and would take a normal dictionary meaning. Where employees are required to start early or finish late on a regular basis, the over 5 hour and 10 rates can be paid provided that all the other qualifying rules are satisfied.