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Subsistence query

Subsistence query on consultant moving between venues

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I have a limited Company client. A husband and wife Director and no other employees on the payroll. The husband is a coach and invoices another limited Company for his services as a consultant. Turnover is approx £60k per annum.

The wife completes admin and bookkeeping. In the home office which is the  registerd office and place of work as per the consultants employment contract.

I know he can claim subsistence while at or travelling to and from a temporary workplace.  The issue is whether he is working at temporary or permanent workplaces.  The consultant travels between many different venues. He is not at any one for more than 40% of his time. The venues change occasionally, some he has been going to more than 2 years but the times may change. The travel is itinerant and could be argued there is no normal commute, rather like a travelling salesman. The journeys are indeed wholly and exclusively for the purpose of the trade.  I therefore propose the mileage is allowable travel.

The consultant puts through his mileage for the travel at 45p / 25p. I actually do not see a problem with the mileage as stated above.

However I feel the subsistence is excessive. I am seeing coffees and water being purchased, cafe expenses at various venues, Deliveroo payments, uber, and restaurant bills. The subsistence and travel without the mileage is around £4k per annum.

I would like to disallow some of the subsistence as I feel it is excessive. However I am having trouble justifying allowing the mileage but potentially disallowing subsistence incurred on the same journey. I would not want to risk questioning over the mileage being allowable by disallowing part of the travel expenditure but not all of it. The below extract seems to suggest an all or nothing approach:

travel expenses’ include the actual costs of travel together with any subsistence expenditure and other associated costs that are incurred in making the journey. This includes:

any necessary subsistence costs incurred in the course of the journey

the cost of meals necessarily purchased whilst an employee is at a temporary workplace

the cost of the accommodation and any necessary meals where an overnight stay is needed - this will be the case even where the employee stays away for some time

Firstly would the cost of subsistence be allowable at the venues themselves? What about on the way home? (If he was working late or otherwise) 

Secondly how do you decide what is and isnt allowable when subsistence being put through involves so many transactions and you cannot tell where these transactions took place a lot of the time. The client tells me they are mostly incurred at venues in the course of duty. I have not the time to go through transaction by transaction and check where things occurred. The client is used to being allowed to claim all these expenses and so this is not going to go down very well, I need to make sure I have my argument well prepared!

I would appreciate your opinion on this matter, travel and subsistence I do find ambiguous and open to intepretation!

Many thanks in advance!

Replies (4)

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By Tim Vane
16th Jul 2019 23:47

You have concluded that the travel is allowable. The client has told you that the expenses are for subsistence associated with the allowable travel. Why are you trying to disallow the subsistence? You seem to be suggesting that you don't like the quantum of subsistence and are seeking to disallow some on the grounds that it is open to interpretation. I think you'll need to get over that.

Thanks (1)
Replying to Tim Vane:
By Marny
17th Jul 2019 14:06

Thank you for taking the time to respond.
I do agree with you in principle, hence why I asked for advice but I also would not want to allow things that HMRC would view excessive. The client is the type that would blame the firm for not advising properly. The need to eat is not a business expense. Hence the morning breakfast bap enroute to the first appointment, the lunch at a café and then the restaurant evening meals in the evening or Deliveroo costs (which are unusually high for one person). None of it is entertainment I am told it is all subsistence during course of business. I would be more inclined to disallow if I was not allowing the mileage. Im not the police and have no wish to fall out with the client but its way more than scale rates and meals and coffees accumulating to over £4k a year for one individual. I mean I can eat that much but...

Thanks (0)
17th Jul 2019 06:31

If he is away from his business base, i.e. his home, he is entitled to claim travel and subsistence assuming he has not been travelling to a workplace location for more than 2 years and more than 40% of his time. He has also confirmed the food is being delivered to his client's address (rather than his home) which is good. The only thing I may do is check whether or not any of the subsistence is personal, e.g. weekends, home delivery take away, or business entertainment. Just send him the nominal ledger for subsistence and ask him to identify what is for business, what is personal, and what is client entertaining.

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Replying to GR:
By Marny
17th Jul 2019 14:18

Thank you for your response, really appreciate it. The classes are all throughout the week including weekends. The Deliveroo would be to his home address I suspect but I don't get paperwork, its an online accounting system and I don't get a lot of detail. So I sent it through (pages and pages) and they said it was all food and coffee in the course of business travel. (and that no one from my firm has questioned before. - Which puts me in a difficult position with a long term client, so I just wanted advice before I speak to anyone in the firm and question what has been done before. Looking back last year Parent pay fees were put as subsistence. (these are school meals) So you can see im a bit dubious about just going with what the previous person allowed. Surely its excessive?

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