Lunch Break Tax Breaks!

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Many employers will be aware that there is a tax break which enables employers to provide meals of reasonable scale to all staff at a staff canteen, free from tax and national insurance.  However there is also a lesser known exemption for meals or light refreshments that are not provided in a staff canteen.

The criteria for this further exemption is narrower than that for meals provided in a canteen: the meals must be provided on the employer’s premises and all of the employees working at that location must be entitled to either a free or subsidised meal. Finally, although there may be a temptation to reward valued employees with cordon bleu cuisine and fine wines, this would not meet the exemption, as meals must be provided on a reasonable scale.

The provision of meals and light refreshments will not be captured by this exemption if they are provided off-site and not at a canteen, e.g. at a restaurant, they are not on a reasonable scale or they aren’t available to all staff, e.g. meals that are provided for directors only. There are separate rules for those meals provided under salary sacrifice or flexible remuneration arrangements.

HMRC do provide examples to illustrate these rules and as always, should you need further information contact your tax advisors.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Image courtesy of David Castillo Dominici at FreeDigitalPhotos.net

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