Subsistence – overseas travel
HMRC have issued an update relevant to businesses whose employees travel overseas. In January 2008, HMRC agreed that employers may use the benchmark rates published by the Foreign and Commonwealth Office (FCO) when paying accommodation and subsistence expenses for employees travelling abroad. The FCO have now informed HMRC that they have ceased producing worldwide subsistence rates as they are no longer using these for their own staff.
HMRC is therefore reviewing its policy of providing benchmark rates for overseas subsistence. However, HMRC will continue to allow employers to use the current rates through the end of the 2010-11 tax year.
Employers also have the option to reimburse actual expenses (with receipts) or to agree a specific scale rate amount with HRMC based on its employees spending habits whilst travelling overseas.
HMRC will issue a further update when it has completed a review of its policy of providing benchmark rates for overseas travel.