EIM16210 - Vouchers and credit-tokens: meal vouchers
Section 89 ITEPA 2003
For a description of the points to consider in a case involving
a voucher or credit-token see
EIM16030.
There is a limited reduction in the cash equivalent of some
meal vouchers under Section 89 ITEPA 2003. The cash equivalent of
the meal vouchers is reduced by 15 pence for each working day
providing the following conditions are met:
- vouchers must be non-transferable and used for meals only
- they are to be used on a day the employee is at work
- where any restriction is placed on their issue to employees, they must be available to lower-paid staff.
The value of any voucher or part of a voucher that does not
comply with these conditions is taxed.
The employer is required to make a return at the end of the
year on form P9D or P11D of the value of meal vouchers in excess of
15p per day. Where, however, the employer wishes to pay the
employee's tax liability on any excess value, the excess should be
grossed up, entered on the deductions working sheet relating to the
employee and taxed under PAYE. In no circumstances is the tax
liability of any employee in respect of an issue of meal vouchers
with a value exceeding 15p per day to be covered by an adjustment
in computing the employer's own tax liability as an alternative to
the grossing up procedure.
As regards the provision of meals for employees who are
directors, or who are not in lower-paid employment, see
EIM21670 onwards.
Problems sometimes arise where employers operating a canteen
for staff, or sharing a canteen with one or more employers in
adjacent premises, provide some sort of meal vouchers or tokens to
staff. They may do this to enable the costs of running the canteen
to be correctly apportioned between departments or employers. There
is no liability to income tax on the provision of these meals
provided the conditions of Section 317 ITEPA 2003 are met (see
EIM21670).
