Upper Tribunal Tax and Chancery Chamber

UT/2023/000049 - [2024] UKUT 00233 (TCC)

Fecha: 16-May-2024

The process for paying subsistence expenses

The process for paying subsistence expenses

15.

The guide to claiming expenses produced for workers by Mainpay for 2010/11 stated as follows (FTT[56]):

To claim your standard Daily subsistence Allowance, you are not required to do anything as Mainpay claims this for you automatically on your behalf based on how many days you have worked for each particular week.

16.

At FTT[57], the FTT noted that this was supported by the “frequently asked questions” accompanying the guide, which stated:

What is subsistence Allowance? Mainpay are able to account for a proportion of your income as subsistence Allowance. This means that typically £13 of your daily rate will be tax free. This is automatically allocated to your invoices and you are not required to send in supporting evidence. This allowance is specifically in relation to the cost you incur for breakfast and lunch.

17.

The guide was amended in 2013/14 to say that workers should retain the original receipts for expenses for six years in case they were requested by HMRC: FTT[60].

18.

The online portal for workers included by default a claim for subsistence expenses. If a worker did not want to make a claim, they had to log into the portal and amend the default amount claimed. Only about 10% of workers removed the default expense claim: FTT[61].

19.

At FTT[63]-[64], the FTT stated:

63.

On 2 April 2009, HMRC issued Revenue and Customs brief 24/09 (“the HMRC Brief”) dealing with benchmark scale rates for day subsistence. It is this publication which first set out the £5 and £10 rates depending on whether the worker had been away from home for more than five hours or more than ten hours respectively. The HMRC Brief noted that the benchmark scale rates could only be used if the employee had actually incurred a cost on a meal and that, in order to use the benchmark scale rates, the employer would need to apply to HMRC for a dispensation.

64.

It is common ground that Mainpay did not apply for a dispensation before reimbursing subsistence expenses using round sum or benchmark scale rates. It appears that at some point in 2013, there was discussion between Mainpay and HMRC as to the possibility of being granted a dispensation but, in February 2014, HMRC indicated that further procedures needed to be put in place before any dispensation could be granted.