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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Vouchers and credit-tokens: meal vouchers

For a description of the points to consider in a case involving a voucher or credit-token see EIM16030.

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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Section 89 ITEPA 2003 was repealed by section 227 and Schedule 39 para.50(1) of Finance Act 2012 with effect from the tax year 2013-14.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 limited reduction in the cash equivalent of some meal vouchers under Section 89 ITEPA 2003. The cash equivalent of the meal vouchers is reduced by 15 pence for each working day providing the following conditions are met:

  • vouchers must be non-transferable and used for meals only
  • they are to be used on a day 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 or part of a voucher that does not comply with these conditions is taxed.

The employer is required to make a return at the end of the year on form P9D or P11D of the value of meal vouchers in excess of 15p per day. Where, however, the employer wishes to pay the employee’s tax liability on any excess value, 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 procedure.

As regards the provision of meals for employees who are directors, or who are not in lower-paid employment, see EIM21670 onwards.

Problems sometimes arise where employers operating a canteen for staff, or sharing a canteen with one or more employers in adjacent premises, provide some sort of meal vouchers or tokens to staff. They may do this to enable the costs of running the canteen to be correctly apportioned between departments or employers. There is no liability to income tax on the provision of these meals provided the conditions of Section 317 ITEPA 2003 are met (see EIM21670).