Subsistence

net71

If an employee is purchasing groceries, ie up to the value of £25 for a 2 night travel expense, instead of dining in a restaurant:

* is this an allowable expense to the limited company?

* Would the employee have to declare the whole amount as benefit in kind?

and how to report in the accounts system.

Thank you in advance

MarieNoelle

The cost of subsistence associated with travel necessary for the performance of the employee's duty is an allowable deduction from earnings ( no benefit in kind). The guidance mentions "subsistence" so I would take the view that it doesn't have to be necessarily a meal out. The timing of the purchase may be relevant though.

https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim31815

A deduction is only allowed for subsistence costs which are attributable to the business travel i.e. costs incurred in the course of the journey which are additional to any costs that the employee would ordinarily incur if they were not travelling on business. For example a deduction would be allowed for the cost of a sandwich purchased at a station whilst travelling on business but not for the cost of a sandwich prepared at home and consumed whilst travelling as this is not a cost incurred in the course of the journey.

The expense would be reported under "travel and subsistence" in the accounts.