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Benchmark scale rates – what they are and how they apply

Benchmark scale rates

It can sometimes be difficult to get receipts for expenses incurred on business related travel and overnight stays. This can make things tricky for employers and employees alike. To make things easier HMRC developed a system of approved standard rates which are the maximum amounts which are free from tax and NICs paid by the employer. These rates can be applied to specific types of expenses and do not require a receipt in order to be paid, as long as other proof of purchase is provided and the expense was incurred during a period of travel or work at a temporary workplace.

What are the benchmark scale rates?

HMRC’s benchmark scale rates for day subsidence apply specifically to the expenses incurred for the cost of meals. These rates were developed in consultation with large and small businesses and are reviewed annually.

The current benchmark scale rates are:

  • Breakfast rate – up to £5:00. This can be paid only where the employee must leave earlier than is usual in their employment for the purposes of travelling to a temporary workplace. If they must leave before 6:00am, or significantly earlier than normal, this rate may be applied.
  • One meal rate (five hour rate) – up to £5:00. This can be paid if the employee is away from their usual workplace for five hours or more.
  • Two meal rate (ten hour rate) – up to £10:00. This can be paid if the employee is away from their usual workplace for ten hours or more.
  • Late evening rate – up to £15:00. This can be paid only to those who do not usually work late during the ordinary course of their employment. If the employee irregularly works after 8:00pm having worked a full normal day this can be paid if the employee buys a meal which would ordinarily be taken at home.

If the employee works past 8:00pm the late evening allowance can still be paid, even if the employee has also been paid under the five or ten hour rules. However, the late working must be an irregular occurrence (not part of their usual shift pattern) and must also be at a temporary place of work.

Do the benchmark scale rates have to be used?

No. These are not compulsory rates. Lower rates can be applied by the employer if they choose. If the employer wants to apply higher rates they can also do so by agreeing a higher rate scale with HMRC. Otherwise, the excess will subject to applicable tax and NICs.

Can I apply these rates as a Limited Company contractor?

Yes, as an employee of your company you may apply these rates to your own qualifying meal expenses. If you have any queries regarding this or any of your other expenses your Intouch accountant will be happy to advise.

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.