Expenses and benefits: meals for employees and directors
What to report and pay
If the meals or vouchers you provide are not exempt, you may have to report them to HM Revenue and Customs (HMRC) and deduct and pay tax and National Insurance on the costs.
Free or subsidised meals that are not exempt
This includes meals that:
- are not on a reasonable scale, for example, elaborate meals with fine wines
- are provided off-site but not at a canteen, for example, at a restaurant
- are not available to all staff, for example, meals for directors only
- provided under salary sacrifice or flexible remuneration arrangements (also known as ‘flexible benefit plans’)
You must:
- report them on form P11D
- pay Class 1A National Insurance on the cost to you
Vouchers for meals outside the workplace
You must:
- report them on form P11D
- deduct and pay Class 1 National Insurance on the value of the vouchers through payroll
Other vouchers, cash allowances or employee accounts
If you provide any of the following, this counts as earnings:
- vouchers that can be exchanged for either food or cash
- cash allowances for meals
- top-up payments to an employee’s account for workplace food and drink using a card or PIN system
For these costs, you must:
- add the amount to the employee’s other earnings
- deduct and pay PAYE tax and Class 1 National Insurance through payroll
Salary sacrifice arrangements
If the cost of the meals is less than the amount of salary given up, report the salary amount instead.
These rules do not apply to arrangements made before 6 April 2017 - check when the rules will change.