Chapter NIM05685
| Published date | 11 April 2016 |
| Record Number | NIM05685 |
Cash payments or vouchers which can be redeemed either for meals or for cash must be included in gross pay when calculating earnings for Class 1 NICs purposes if they are provided in connection with attendance at a permanent workplace.
Meal vouchers which can only be redeemed for meals should not, however, be included in gross pay if they satisfy the requirements of either paragraph 5B or paragraph 6A of Part 5 of Schedule 3 to the Social Security (Contributions) Regulations 2001 (SI 2001 No 1004).
- Paragraph 5B(e) of Part 5 previously excluded from Class 1 NICs liability meal vouchers in respect of which no liability to income tax arises by virtue of section 266(3) of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003). - see NIM02431. Section 266(3) excludes meal vouchers provided for employees by an employer if the voucher can only be used to obtain anything that is exempt from tax by virtue of section 317 of ITEPA 2003. Section 317 ITEPA 2003 exempts the direct provision by employers of subsidised meals, providing certain conditions are met. See EIM 21672 for guidance on the conditions contained in section 317 ITEPA.
- Paragraph 6A of Part 5 excludes from Class 1 NICs meal vouchers to the value of 15p per working day up to a maximum of £1.05 per week - see NIM02437. This was amended from 6 April 2013 and all meal vouchers are now to be included as earnings for the purposes of calculating NICs liability.
Before 6 April 2003 this tax exemption was provided by virtue of extra statutory concession ESC A74, see SE21675.
Payments in connection with business travel - pre April 1998Before the introduction of the new travel rules for tax purposes in April 1998, and the mirroring of these rules in NICs legislation, meal allowances paid in relation to travel undertaken for business purposes were excluded from Class 1 NICs by virtue of what was then regulation 19 (4) (b) of the Social Security (Contributions) Regulations 1979 (now paragraph 9 of Part 8 of Schedule 3 to the Social Security (Contributions) Regulations 2001].
They were accepted as actual business expenses because they were specific additional costs incurred in carrying out the employment. They were, however, always considered separately to the cost of the travel itself and each subsistence payment (including payments made for meals) had to be considered to determine whether it satisfied the criteria for exclusion as a specific...
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