Subsistence query again!!

edkav Feels At HomeRegistered Posts: 37 💫 🐯 💫
I recently posted a query on this and was given a link which was useful, but am having problems putting it into context for clients.

One of my new clients insists that there is a £5 a day subsistence allowance that all his mates claim for. I cannot find any evidence of this being allowed. Can anyone shed any light on this, or advise me on how they deal with subsistence?!

Edwina :001_unsure:


  • Devilishbird
    Devilishbird Feels At Home Registered Posts: 56 💫 🐯 💫
    The £5 per day they are referring to is actually an amount that Inland Revenue stated could be claimed unreceipted. However I cannot find it anywhere on their site so this might have changed not too sure!
    With regard to subsistence IR see that as long as it was unaviodable and was "wholly & exclusively" needed for the purpose of the business then aslong as the subsistence claimed is not excessive then it is allowable. I do scale rates which is dependant upon the length of time that the employee spends from their base performing the work needed.
  • Devilishbird
    Devilishbird Feels At Home Registered Posts: 56 💫 🐯 💫
    In fact thinking about it again I think this is what you and they are referring to. I remember this as I had this "problem" when I started working for my current employers where the employees had this attitude. It infact is a rule covering "Incidental Expenditure" please see the link, You can always ring up HMRC to gain further clarification:
  • edkav
    edkav Feels At Home Registered Posts: 37 💫 🐯 💫
    Thanks for your help, will check out the site. :001_smile:
  • deanshepherd
    deanshepherd Font Of All Knowledge Registered Posts: 1,809
    Ask HMRC to add it to a dispensation and then you don't have to worry about it.

    The Revenue's own in-house policy was to provide a £5 allowance for employees working at a distance of more than 5 miles for more than 5 hours a day.
  • payrollpro
    payrollpro Trusted Regular Hampshire/SurreyRegistered, FMAAT Posts: 425

    What we are taking about is a PIE! Personal Incidental Expenditure and as Dean says it is what used to be the revenue's own approach to employee subsistence in the past which they have extended to the rest of us mere mortals, nice of them eh?

    As long as the business journey invoves an overnight stay in the UK and is therefore too far for the employee to return home then they may claim "up to" £5 per night without the production of receipts. They can only spend it on newspapers, minor personal spending, telephone calls etc and as soon as it goes over £5 the full travel and subsistence rules kick in.

    Employers are required to have controls so that minor spending claimed by employees under the PIE rules are disallowed if they also appear on the hotel bill.

    So it is not a £5 payment and I have seen compliance teams disallow all the PIE's for 6 years where everyone just claims £5 a night. Treat this subject with care is all I will say.

    Oh, and by the way, it is £10 a night for an overnight stay outside the UK.

    As a matter of interest i recently negotiated a dispensation for a client for occasional loss of receipts. I pointed out to the revenue that employees who travel a lot will naturally come home and find they have lost one or two receipts from a long journey or set of journeys and as I was sure the same thing happens with the revenue why can't there be an easment if it is genuine, minor and very ocassional. It seems revenue officers do sometimes lose receipts and they do get paid and they dont pay tax on it, so my client got a dispensation as long as there are controls.

  • edkav
    edkav Feels At Home Registered Posts: 37 💫 🐯 💫
    Thanks for your detailed reply. Very helpful - thanks alot.:001_smile:
  • pussycat58
    pussycat58 Settling In Nicely Registered Posts: 21 Dedicated contributor 🌟 🐵 🌟
    thanks folks for those. this makes so much more sense to me now. i had a client whose prevoius accountant had this expense and i always thought of subsistence as bus expense when you you stay overnight.

    i feel really silly and concerned now cos i wrote to the accountants to ask how it had been calculated! I asume its this PIE cos it was 260 for both of 2 previous years which is 52 x 5!:blushing:

    i wasn't doing any tax at the time but i just got it added to my new licence for next month for SA sole traders.
  • DaveP
    DaveP Feels At Home Registered Posts: 79 💫 🐯 💫
    The PIE is not for subsistence, it is for incidental expenses that you incur on overnight stays because you are not at home. As a guide, it is generally 'extras' on a hotel bill such as newspaper, personal telephone calls or a movie.

    Subsistence is the cost of food and drink you had to incur because you were away from home during your normal working day. This could be on an away day or overnight stays. This can be claimed in addition to the PIE allowance which is only for overnight stays.

    However, you suggest that your client is self-employed in which case the PIE does not really apply. This is an allowance for employees.

    I would also suggest that the £260 is just a guesstimate provided by the previous accountant. The £5 allowance would be per overnight stay and not per week.

    See here for more on subsistence for the self-employed.
  • pussycat58
    pussycat58 Settling In Nicely Registered Posts: 21 Dedicated contributor 🌟 🐵 🌟
    cheers Dave for that, i've just printed the page

    my client is a market trader and travels to market 3 days a week. it is more than the 5 miles i read on one of the other links but i think this was for empolyees as well. the only other bus travel he would have is if he collects his supplies.

    anyway he has just aksed me to complete his tax return for him so i guess i can write back to the previous requesting the usual tax info (template from poodle) and see what happens there

    thanks everyone for your contributions
  • DaveP
    DaveP Feels At Home Registered Posts: 79 💫 🐯 💫
    The costs of travel are fine for those 3 days but in the guidance it states that subsistence can only be claimed for journeys "outside the normal pattern". Travelling to market for a market trader is not outside the normal pattern.
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