Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Employment Income Manual

HM Revenue & Customs
, see all updates

Employment income: meal vouchers: exemption of 15p per day

Section 89 ITEPA 2003

Section 89 ITEPA 2003 was repealed by section 227 and Schedule 39 para.50(1) of Finance Act 2012 with effect from the tax year 2013-14.

The following guidance applies only in relation to tax years up to and including 2012-13.

There is a 15 pence per working day exemption from an income tax charge on some meal vouchers provided to employees.

The exemption applies whatever the level of the employee’s income.

Where the value of meal vouchers provided to an employee exceeds 15 pence per working day only the excess is taxable. Only the excess has to be included on form P9D (for 2015/16 and earlier) or P11D by the employer.

The cash equivalent of the meal voucher is reduced by 15 pence for each working day providing that the following conditions are met:

  • vouchers must be non-transferable and used for meals only
  • they are to be used on days when the employee is at work
  • where any restriction is placed on their issue to employees, they must be available to lower paid staff.

The value of any voucher that does not comply with these conditions is taxed.

Where an employer wishes to pay the employee’s tax liability on the excess value of meal vouchers, the excess should be grossed up, entered on the deductions working sheet relating to the employee and taxed under PAYE. In no circumstances is the tax liability of any employee in respect of an issue of meal vouchers with a value exceeding 15p per day to be covered by an adjustment in computing the employer’s own tax liability as an alternative to the grossing up procedures.

As regards the provision of meals for employees (for 2015/16 and earlier who are neither directors nor in lower paid employment) see EIM21670 and EIM21671.