Meal Allowances Money for Nothing and Drinks for Free

Did you know the government (you) give money (by way of subsidy) to contractors for meals?

Why? Everyone has to eat whether they work as a permanent employee or as a contractor. And we eat whether it's during the working day or at the weekend.

As tax expert Bob Jones says "The bottom line is that we eat in order to live and not in order to work so why tax free meal allowances?"

Testing Times

The overriding test for any business expense is that it must be incurred wholly, exclusively and necessarily in performing the duties of the employment.

It's a stringent rule and when it comes to meals it's covered by travel legislation. ‘Travel' includes both the cost of transport and meals.

If a contractor has to travel in order to carry out their duties it is an allowable expense.

Circular Reference

Can it be argued that a meal is part of the cost of travel? Perhaps, but only if the meal is an extra expense - that is if the individual would not have eaten if they had not travelled.

Is the travelling the reason a meal had to be bought? Does it mean more money had to be spent on the meal than would have been the case if not travelling?

It's really the extra expense that should be claimed, but in reality it's impossible to work out - so HMRC allow the full amount.

Draw the Line

Jones adds: "There is no extra expense if a person takes a packed lunch from home.

HMRC will also argue that there is no extra expense if the person prepares their own sandwiches either at the workplace or at the accommodation if the person is working away from home.

In these circumstances the expense is incurred in order to live. It is not an extra expense attributable to travel. It is important to note that HMRC literature refers to the purchase of a meal.

HMRC will not accept that the purchase of ingredients will qualify as the purchase of a meal. They will not grant a dispensation in that respect and they will not accept such a claim from an individual.

It is the view of HMRC that it is a meal that must be purchased."