Employers can opt to reimburse qualifying subsistence expenses incurred by their employees when travelling for work using the benchmark scale rates set by HMRC. This has the advantage of simplicity and also sets a cap on the expenses which the employer will reimburse.

The benchmark scale rates represent the maximum amount that the employer can pay free of tax and National Insurance and without the need to report the payments to HMRC.

Under the rules as they currently apply, the employer is required to have systems in place to check that the employees are actually incurring amounts in respect expenditure on meals (for example, by checking receipts or credit card bills) and also that the expenditure would have been deductible had the employee incurred the cost him or herself without reimbursement from the employer.

Legislation is to be introduced in the Finance Bill 2018/19 to remove the requirement for employers to operate a system for checking employees’ expenditure where benchmark scale rates are used. Instead, the employer will only be required to check that the employee has undertaken qualify travel. The checking requirement will be abolished from 6 April 2019.

The simplification may mean benchmark scale rates will become attractive to a number of employers.

Benchmark Scale Rates

Benchmark Scale Rates for employee travel outside UK