In our weekly Q&A series, our VAT expert at Croner Taxwise, sets out the tax compliance rules for employer provided meals and subsidised canteens
My client owns a pub/restaurant and provides his staff with a meal halfway through their shift, is this a taxable benefit?
If a free or subsidised meal is provided to employees by their employer there may be tax relief by exemption or by deduction. This includes the following:
- if the meal is part of an employee or director travelling on qualifying business travel;
- if the employee’s or director’s meal is part of business entertaining and there is a matching deduction under section 336 ITEPA 2003; and
- under the exemption in section 317 ITEPA 2003.
- In the client’s case, by providing a meal to his staff during their working hours, there is no tax charge if the meal is provided in either a canteen or at the workplace and the following four conditions are met as detailed in section 317 ITEPA 2003.
The conditions are:
