Subsistence payments are usually made to employees who work away from their permanent workplace. The most commonly made payments are for accommodation and meals.
With effect from 6 April 1998 the NICs treatment of travel and
subsistence payments is aligned with the treatment for tax
From that date necessary travelling expenses include the cost of any subsistence costs which are also necessary and which are attributable to that journey. If an overnight stay is needed then the cost of the accommodation and any meals is part of the necessary travelling expenses. Even where an employee stays away from home on business for some time, if the travel expenses are necessary travelling expenses the cost of meals and accommodation is part of the overall cost of the business travel.
To qualify for exclusion from NICs the subsistence must be part of the necessary qualifying travelling expenses.
See NIM06250 for general guidance on what can be excluded from NICs as necessary travelling expenses.
Before 6 April 1998 subsistence payments were capable of being
excluded from NICs if they could be shown to be specific business
NIM05020 for guidance on what
constitutes a business expense.
An employer might make subsistence payments in various forms. NIC liability depended on how the payment was made: