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Reimbursing Travel & Subsistence (Meals)

Travel Subsistence - Reimbursing meals - BIK

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We do not have much travel within the company, it only happens occassionly during the year, then once a year when we attend a trade show/exibition when 4 or 5 members of staff attend.

We have always reimbursed staff for the cost of meals while on business travel (sandwiches and a drink at service station usually). However, a receipt dropped on my desk this morning for £53 for lunch that 3 sales guys had following a meeting (approx 120 miles travel each way if that makes a difference).

My fault that the system was open to abuse, so now I ned to tighten thing up. How is everyone else handling it? 

 I am thinking of starting to use HMRC scale rates of £5 (5 hours) and £10 (10 hours). Keeps it nice and simple and no need for supporting receipts to be provided. Is anyone else doing this? 

How would it work when the guys attend the trade show once a year ?  £5 doesn;t go far an the ExCeL in London !

Does anyone use an online system for expense claims?

Thanks

 

Replies (21)

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By The Dullard
21st Nov 2019 10:29

WTF? £53 for 3 of them? So they went to Nandos instead of McDonalds! You have actual evidence of actual expenditure in circumstances where a subsistence expense is perfectly justified.

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By paul.benny
21st Nov 2019 10:49

There are plenty of online systems such as Concur but if your travel is infrequent, it's probably not worth the cost/effort of implementation, especially if your travellers are all based onsite.

Agree with The Dullard that £53 isn't much. If you think that's 'abusive' spend, you clearly need to get out more. Are you as tight-fisted with other spend?

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Replying to paul.benny:
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By Accountant A
21st Nov 2019 11:25

paul.benny wrote:

Are you as tight-fisted with other spend?

Let's put it this way, he thinks professional advice should be available for free.

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By timcbaker
21st Nov 2019 11:51

wow - I'm getting pelters here !

I was comparing HMRC's £5 scale rate to the £17 per person we are paying out on this expense.
Or doesn't it matter if they get a Greggs meal deal or a 3 course slap up lunch in a Michelin star restaurant?

Surely there comes a point where it comes rise to a BIK ?

yeah, I definitely need to get out more - I get told that a lot !

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Replying to timcbaker:
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By Accountant A
21st Nov 2019 12:04

timcbaker wrote:

wow - I'm getting pelters here !

What is stopping you taking professional advice on this from your business's accountant?

This is a forum for finance professionals not business owners who want something for nothing.

Hope that helps.

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Replying to Accountant A:
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By paulwakefield1
21st Nov 2019 15:21

Not really. It is just filling up the thread (much as this response is) with a gratuitous pop at the OP who is perfectly entitled to ask the question. Hope that helps.

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Replying to timcbaker:
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By paul.benny
21st Nov 2019 13:45

There may well be a point where HMRC would take issue with the cost of meals - the Employment Income Manual mentions only 'reasonable'. I think there's plenty of headroom between your £17/head and the level at which HMRC would look askance.

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By timcbaker
21st Nov 2019 12:10

I am not a business owner, I work as a Financial Controller.
I thought the purpose of this forum was to ask any questions Accountancy related.
Apologies if I misunderstood.

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Replying to timcbaker:
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By Accountant A
21st Nov 2019 13:38

timcbaker wrote:

I am not a business owner, I work as a Financial Controller.
I thought the purpose of this forum was to ask any questions Accountancy related.
Apologies if I misunderstood.

Why is the Financial Controller dictating staff expenses policy? I would have thought that was a job for the HR function.

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Replying to Accountant A:
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By paul.benny
21st Nov 2019 13:46

I always try to keep anything with numbers away from HR.

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Replying to paul.benny:
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By Accountant A
21st Nov 2019 13:53

paul.benny wrote:

I always try to keep anything with numbers away from HR.

Still an employment Ts & Cs matter, I would have thought.

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Replying to Accountant A:
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By paul.benny
21st Nov 2019 14:35

Expenses policy would not normally be contractual - except to the extent of a commitment to reimburse expenses incurred in accordance with travel policy.

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Replying to paul.benny:
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By timcbaker
21st Nov 2019 14:57

Thanks Paul.
No policies currently in place. Something I need to have think about.

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By timcbaker
21st Nov 2019 14:09

Just investigating if we should have a policy in place to prevent any potential BIK's rising. Seeing what policies other companies have in place.

We don't have a dedicated HR dept as such.

Seems from paul.benny reply that I am worrying about nothing.

Thanks for the input all.

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By tom123
21st Nov 2019 16:11

We pay around £20 for an evening meal (with receipts), which can include an alcoholic drink if a hotel stay is involved.

The £5 is for incidental expenses.

Surely, as an FC, you can see that only paying £5 would seriously pxx staff off?

I would not want to be that tight - if I particularly wanted to retain staff.

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Replying to tom123:
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By timcbaker
21st Nov 2019 16:24

Yes, on reflection I agree the £5 is tight. I did always think it was a bit unrealistic but I just plucked that figure from HMRC's scale rates though. Although it seems I misunderstood that too as you have confirmed it is just for incidentals.
Thanks for taking time to reply, I intend to put a policy in place. With some more generous limits :)

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By pauljohnston
28th Nov 2019 10:42

Just had asimalar question from a client.

It makes sense for the Company to have a policy regarding expenses incurred for employees. Different levels can have a different policy.

Some I have seen will say £20 per head with receipts/proof of purchase and if an overnight stay then £5 for incidentals although that seems tight these days with the FT costing £2.50

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By [email protected]
28th Nov 2019 12:03

I'm sure the HMRC rate hasn't changed since the begining of time. probably was adequate at the time but now is hoplessly out of touch.

As for what's reasonable, that rather depends on who and where but I'd go with a rule of thumb of 2 course meal + beverage. Drinks not with a meal are personal.
Of course if there was anyone other than employees (and they're all away from their normal workplace) present then it is Entertaining.

As for HR - many small companies look to the accountant for HR advice, and the FC should (in my opinion) be involved in writing the financial part of any HR policies.

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By [email protected]
28th Nov 2019 12:26

Our company supplies a reputable online expenses solution that enables you to add company spending policies so that staff know how much they are allowed to spend on things like subsistence etc. You can make this a hard or soft rule. it also has built in authorisation rules and can store electronic receipts and as an extra bonus we have also developed an interface which brings data into Sage. If you are interested feel free to get in touch.

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By johnt27
28th Nov 2019 12:57

Plenty of expense systems out there - hard to say which one would be best for you without knowing how many employees you have, what accounts and HR systems you use and whether or not you want them all integrating

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By john hextall
28th Nov 2019 14:54

My understanding is that (from HMRC's point of view) if you go out for about half a day, it's reasonable to have to pay for coffee and cake somewhere for about a fiver. If you go out for a full day, you need to get some lunch which will cost up to about £10. In either case, you don't need a receipt as this is (more than) reasonable expenditure. Sometimes, you can't get lunch for that for whatever reason and then you need a receipt. The receipt can be challenged - for example £50 a head for lunch would need a lot of justification and is really in the territory of 'business entertaining' which is a different kettle of fish - but £17 most people would see as OK unless you are being tight and want to make a point, in which case you would need to be operating a rigid expenses policy. Once in a blue moon, this amount is trivial in my opinion and not worth arguing about.

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