Taxman pounces on swipe-card subsidised staff meals

13 June 2008 by
Taxman pounces on swipe-card subsidised staff meals

Caterers have been warned that the tax man is poised to start taxing subsidised staff meals paid for via swipe cards.

The move will concern employers and caterers, who have increasingly turned to swipe cards to make administration simpler and to allow monitoring of consumption.

Roger Williams, partner at Wilkins Kennedy, said: "Swipe cards systems are very common and a highly efficient means of administrating free meals.

"Employers could be hit with a sizable retrospective tax bill if these arrangements are challenged. For employers, replacing these systems will be enormously costly and create a lot of needless red tape."

Wilkins Kennedy issued its warning after the Revenue published a recent statement stating that "employees should treat amounts credited to canteen accounts as earnings for the purposes of PAYE and Class 1 NICs".

Kennedy added: "HMRC's objection seems to be that employees are being given cash to buy food, rather than a token or simply free food itself, but the cash on the swipe card can only be used to purchase meals in the workplace, so the distinction seems a little spurious."

If staff help themselves in work restaurants, or tokens are used for payment, they will still qualify for an exemption.

REIT decision could transform pub sector >>

Wage probe won't meet July deadline >>

Tax deductions on tips >>
Revenue to appeal against tronc ruling >>

BHA welcomes government tax help for flood victims >>

By Chris Druce

E-mail your comments to Chris Druce here.

The Caterer Blog]( Catch up with more news and gossip on the Caterer Blog here
[Newsletters For the latest hospitality news, sign up for our e-mail newsletters.
The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.


Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking