SE21671 - Benefits: subsidised meals: canteen meals

Section 155(5) ICTA 1988

There is no tax charge on the provision of meals for directors or employees within Part V Chapter II ICTA 1988 in any canteen in which meals are provided for the staff generally.

Note that the exemption applies to meals provided in ANY canteen. The canteen does not necessarily have to be on the employer's premises, or restricted to the employees of one employer. For example, on an industrial estate there may be a single canteen serving the employees of all employers on the estate. Meals provided in that canteen are within the exemption as long as they are available to all employees of the employers concerned.

Note also that there is no need for all the employees to get the same level of subsidy in the canteen, or any subsidy at all. Provided the canteen is open to all employees, the exemption applies to those who get a subsidy even if some others do not.

The word “canteen” has its ordinary meaning. A restaurant, cafe, public house or similar establishment which serves meals to the public at large is not a canteen.

See SE21675 onwards before seeking liability in any case where:

• an employer provides directors or employees with free or subsidised meals on his business premises (though not in a canteen) or
• an employer provides his employees with vouchers which can be exchanged for canteen meals or
• an employer in the hotel, catering or similar business provides his employees with free or subsidised restaurant meals.

See SE21675 for concessional treatment of certain free or subsidised meals on the employer’s premises or in a canteen.