Subsistence expenses

Produced by Tolley in association with Philip Rutherford

The following Employment Tax guidance note Produced by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:

  • Subsistence expenses
  • Introduction
  • Subsistence expenses
  • More about ‘in the performance of duties’ and ‘necessary attendance’
  • Subsistence when away on business
  • Level of reimbursement
  • Scale rates
  • Salary sacrifice
  • Expenses paid through intermediaries
  • Outcome of recent consultations

Subsistence expenses


Subsistence is the amount incurred as a consequence of business travel. Typically it relates to accommodation and meal costs incurred. These amounts are allowed because they are associated with the necessary travel. See the Travel expenses guidance note for more information of when travel expenses are allowable.

If an employee qualifies for tax relief for a travel expense, they should also qualify for relief for the subsistence associated with the travel. These rules are different from the general rule for deductibility of expenses, in that the subsistence expense does not need to be incurred ‘wholly and exclusively’. This is because, with any subsistence, there are likely to be elements of mixed or private purpose, eg meals taken on a trip or overnight accommodation because the employee needs sleep.

As a result of the exemption for expenses that are either business expenses or the reimbursement of HMRC-approved amounts, it is incumbent on an employer to keep the necessary processes, systems and controls to ensure that business and non-business expenses can be correctly identified and recorded.

The tests described below cover both travel and subsistence expenses.

Subsistence expenses

In order for subsistence expenses to be allowable, it must be incurred in association with travel that satisfies one of two tests, either:

  1. it is ‘necessarily incurred in the performance of duties’

  2. the travel is ‘for necessary attendance’

See Example 1.

Before applying those tests, ensure ‘that the employee is obliged to incur and pay them as the holder of the employment’ under ITEPA 2003, ss 337(1)(a), 338(1)(a). The test is common to both provisions. Commentary and examples on bo

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