Subsitence Claims

[bertie78]

OK - before I have anyone (urrrh hummm NorthenLadUK) jump down my throat to search the forum - I have done and none of the answers seem to address my query directly. So - very simple questions, and should hopefully be very simple answers.

Set the scene: I have a private Ltd company, I am the director. I stay in the area of my contract Mon-Thur, having secured lodgings at a rate of £400/month. I cook for myself Mon-Thur, make my lunches each day etc and budget £30/week for subsistence. I pay for these out of my account and claim them back from the company.

Questions:
1) Can I do a straight forward expense claim for these costs without a dispensation?
2) If answer to (1) is "No", will filling out a dispensation incur any additional 'hassle' for other claims etc or just in general?
3) Will I avoid any of this if I just use my company's debit card?
4) If the answer to (3) is "Yes", do I need to do anything specific in terms of accounting?

I thank you all in advance and if I need to clarify anything, please let me know.

[PerfectStorm]

I think the fact you have cooking facilities and use them means you're doing something that you could do at home anyway, and that there's no expense accrued.

If you go out for lunch every day that would be different?

[northernladuk]

Probably not found anything as they are pretty fundamental questions. A very brief chat with your accountant could have cleared it all up.

An interesting article on dispensations btw...
Dispensation contractor receipts claim

[TykeMerc]

I often work away Mon-Fri and rent so I've done exactly what you're doing with one difference. In the opinion of my accountants charging a subsistence cost to the company for what's basically a grocery bill is not on. You would be buying those groceries at home, it's impossible to argue that the expense is business related.

For the sake of the tax on £30 a week you're risking HMRC carving you a new one and investigating every tiny transaction it seems thoroughly daft.

Incidentally grocery bills have been discussed on more than a few occasions before, no matter how you try to dress it up that's what you're trying to expense.

[northernladuk]

I often work away Mon-Fri and rent so I've done exactly what you're doing with one difference. In the opinion of my accountants charging a subsistence cost to the company for what's basically a grocery bill is not on. You would be buying those groceries at home, it's impossible to argue that the expense is business related.

For the sake of the tax on £30 a week you're risking HMRC carving you a new one and investigating every tiny transaction it seems thoroughly daft.

Incidentally grocery bills have been discussed on more than a few occasions before, no matter how you try to dress it up that's what you're trying to expense.

Indeed.

I think this example covers it
Travel expenses: general: accommodation and subsistence: subsistence costs that are not attributable to the travel: examples

An employee who has to make a business journey takes a packed lunch that he has prepared from items purchased as part of his weekly supermarket shop. The cost of the packed lunch (even if it could be precisely identified) is not an expense incurred in the course of the journey and so is not attributable to the travel for the purpose of Sections 337 and 338.

I'd imagine the same argument could be made for preparing evening meals.

[SlipTheJab]

I often work away Mon-Fri and rent so I've done exactly what you're doing with one difference. In the opinion of my accountants charging a subsistence cost to the company for what's basically a grocery bill is not on. You would be buying those groceries at home, it's impossible to argue that the expense is business related.

For the sake of the tax on £30 a week you're risking HMRC carving you a new one and investigating every tiny transaction it seems thoroughly daft.

Incidentally grocery bills have been discussed on more than a few occasions before, no matter how you try to dress it up that's what you're trying to expense.

+1, at £30 quid a week, you're saving equates to just over a fiver, worth a HMRC investigation?

[MrMarkyMark]

+1, at £30 quid a week, you're saving equates to just over a fiver, worth a HMRC investigation?

Exactly, a fiver, FFS.

[LisaContractorUmbrella]

Agreed - I don't think you have any justifiable claim for subsistence - there has to be a cost incurred for an expense to be allowable and it doesn't sound as though that's the case here

[ASB]

Pay 30 quid on bits and pieces, not claimable. Net cost to you 30.

Travel expenses: general: accommodation and subsistence: subsistence costs that are not attributable to the travel: examples
Self employed overnight subsistence expenses | AccountingWEB

Pay 200 quid on meals out, probably claimable. Net cost to you 140.

If you buy 10 meal deals at £3 from the supermarket then that is claimable. It's prepared. So the hot chicken off the deli counter might be.

Flat rate 5 or 10 pounds per diem will probably not cause a problem. Scale rates for travel in accordance with your situation will probably not cause a problem. (Strictly receipt not required but "some" expenditure is and needs to be evidenced).

EIM05200 - Employment income: scale rate expenses payments: general
EIM05230 - Employment income: scale rate expenses: subsistence expenses: advisory benchmark scale rate payments
EIM05231 - Employment income: scale rate expenses: subsistence expenses: table of benchmark scale rates

Ultimately it is your company and your responsibility. You may, at some point, be required to justify it to HMRC at some point, but there is plenty of evidence of people who have.

Whether or not it is worth the effort is a different thing. Yes it is only 6 quid a week tax saving on 30 quid. But that is 300 a year. Pays a phone bill, house insurance or similar.

[northernladuk]

Whether or not it is worth the effort is a different thing. Yes it is only 6 quid a week tax saving on 30 quid. But that is 300 a year. Pays a phone bill, house insurance or similar.

Eh? My LTD already pay these.