The following Employment Tax guidance note Produced by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:
A large number of employers will provide canteen or meal facilities for their staff. The provision of this benefit can take a number of forms, including through subsidised canteens, meal vouchers or free meals. Additionally, some employers provide lunch allowances in the form of cash allowance.
Depending on the circumstances of the benefit, it will attract a different range of PAYE, NIC and reporting requirements. Employers enjoy a large number of exemptions from the charge to tax and will be discussed in this guidance note.
Canteen meals enjoy a total exemption from tax, NIC and reporting if a number of requirements are met. These are found in ITEPA 2003, s 317 and include:
the meals should be in a canteen
on the employer’s business premises
not provided as part of a salary sacrifice arrangement
Therefore, an employer can provide meals offsite as long as the first requirement is met. HMRC defines a canteen as something which is not a restaurant, public house or café. It will generally be clear what constitutes a canteen, particularly when it is onsite. If there is any doubt as to whether an offsite premise constitutes a canteen, approach HMRC for a pragmatic resolution. Employers can approach their Customer Relationship Manager or Customer Coordinator in the case of larger employers or their local PAYE Office in other cases and discuss their individual circumstances.
In practice a group of employers on a trading estate may group together to pay for a canteen for all of their employees. In this instance, all of the employees would be able to benefit from the exemption.
The exemption applies equally to the provision of free or subsidised meals as it does to vouchers which achieve the same result.
An employer cannot provide meals that are not on a reasonable scale, such as particularly lavish meals as this would be considered staff entertaining. HMRC will take a dim view of overly lavish restaurant facilities which might be provided
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
List of supplies that are exempt from VATThe goods or services that are exempt from VAT are listed under various group headings within VATA 1994, Sch 9.It is important to remember that not all supplies that come within a heading will be exempt from VAT. For example, income from the placing of bets
Duty to prepare trust accountsUnder the laws of England and Wales, trustees have a duty to account to the beneficiaries for their financial administration of the trust fund. This duty is established by a substantial body of case law. In the case of Armitage v Nurse, Millett LJ stated:“Every
VAT fuel scale chargesWhat are fuel scale charges?The VAT fuel scale charge is a simplified method that can be used by a business that funds both business and private mileage costs for employees to account for any output tax due on the private use of the vehicle. The charge was introduced to
Current year relief and carry back lossesCurrent year relief for trading lossesTrading losses can be offset against total profits of the same period. Total profits covers, for example, chargeable gains or non-exempt dividends.The maximum claim for relief is the lower of the available loss or the