Employee Lunch/Dinner Expenses
My Sales Manager is on the road 2-3 times per week in his company car and sometimes has to stay overnight in hotels if he’s got a long journey. As a Employer, do I pay for his lunch on those days he is travelling, and how much should I pay him for lunch expenses? On an evening I pay him £15 for an evening meal plus £5 for a beer. What is normal in this scenario? Bearing in mind we are a small start-up business.
there are two factors here, what HMRC say and what your want to do as a business.
HMRC generally say you must have receipts, but do not specific an amount you can pay. There is a £5/night "incidentals" which might be where you have got the "beer" allowance. You can pay for lunches.
What they dont allow is a flat rate "per night" tariff unless you make a specific agreement with them. For a micro biz which I assume you are, then you are unlikely to have these in place, so claim receipts.
From your employer/business point of view then setting a maximum rate makes a lot of sense, then just refunds upto the maximum and if they go over then its their problem. Having said that you ought to be sympathetic if they are running up extra costs due to being out on the road as they might become resentful if they feel they are out of pocket. For example with hotels sometimes there simply isnt anywhere cheap to stay at short notice, and you might have to stump up for a big bill once in a while.
Fundamentally the policy is down to you and your employee the key thing is to make it clear and reasonable, and make sure you have all the receipts. The easy way to ensure that is not to pay your employee unless they keep them!
I hope that helps
James Smith [i]Chartered Accountant[/i] www.jamesesmith.co.uk --------------------------- Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT