Autumn Budget 2017: Abolition of receipt checking for benchmark subsistence payments

Since the abolition of dispensations last year a new system of benchmark scale rates has been widely adopted by businesses. There remained a need to either formally agree the use of these rates with HMRC or to check receipts as evidence that expenditure had actually occurred.

As a result of the changes announced today, employers will no longer be required to check receipts when making payments to employees for subsistence using benchmark scale rates. This will apply to standard meal allowances paid in respect of qualifying travel and the newly legislated overseas scale rates. Employers will have to ensure that employees are undertaking qualifying travel and it seems reasonable to expect the compliance reviews will want to see evidence of that travel. The change will have effect from April 2019. Abolition of receipt checking does not apply to amounts agreed under bespoke scale rates or industry wide rates.

Employers who pay subsistence expenses to employees who travel in the performance of their duties will welcome this easement. It should remove the existing issue of obtaining receipts or only obtaining them long after the event. It should not be considered as license for employees to claim expenses when meals are not actually taken and employers may wish to impose some form of random spot checking to ensure this does not happen in practice.