planIT adopts HRMC’s benchmark subsistence rates

May 5, 2009

HMRC recently announced important changes to subsistence expenses affecting umbrella company contractors. They introduced across the board subsistence scale rates (benchmark rates) that all umbrella companies can adopt. This is effectively a fixed amount for out of the house meal expenses, which contractors can claim tax-relief against without providing receipts. 

Contractors who are out of the house for 10 hours or more a day may claim £10 a day. Contractors who are out of the house for less than 10 hours and more than five hours may claim £5 subsistence daily. In addition, contractors who leave their home, earlier than usual, and before 6AM may claim an additional £5 for breakfast. This is for irregular early starts only; it cannot be claimed on a daily basis. Contractors must be site based workers and actually incur a cost in order to claim the scale rate.  

Following words with actions, HMRC are taking steps against the abuse of expense dispensations by some rogue umbrella companies. planIT welcomes these changes which simplify the process, reduce paperwork and create a level playing field for all providers. In the past, umbrella companies have operated a variety of dispensations in different ways; a system that was open to abuse. As a result planIT chose not to adopt available dispensations, and insisted on receipts for all subsistence expenses in order to operate a transparent system and protect our contractors from any doubt.   

Because the new benchmark system is a simple, fair, one-rule-for-all policy, planIT have adopted it with immediate effect. From now on, planIT Solutions contractors are not required to provide receipts for subsistence claims at the end of each month as outlined above. Contractors under the planIT solutions umbrella have been sent correspondence regarding how these changes will affect them and will shortly notice changes in the Tax Relief Claim Forms that reflect the new benchmark subsistence rates.