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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Particular benefits: subsidised meals on the employer's premises or in a canteen

Section 317 ITEPA 2003

The Section 317 ITEPA 2003 exemption (see EIM21671) applies if all employees of the employer concerned may obtain a free or subsidised meal. There is no requirement that all the employees actually do obtain meals, whether frequently or infrequently. The opportunity for all employees, at some time or other, to get a free or subsidised meal is enough to meet the terms of the exemption. However, if that opportunity is not open to all the employees, that is some employees do get the opportunity to have a free or subsidised meal but others do not, the exemption does not apply, unless those others are given free or subsidised meal vouchers.

For employers with more than one site, the exemption applies if all employees have the opportunity to enjoy a free or subsidised meal. It may be that free or subsidised meals are not available at every site, but if an employee at a site where the facility is not available could enjoy a free or subsidised meal if they were visiting one of their employer’s sites where the facility is available, the terms of the exemption are satisfied.

Note also that the exemption applies to meal vouchers only to the extent that those vouchers are tickets or tokens used to obtain meals on the employer’s business premises or in a canteen open to the employees generally. It does not apply to meal vouchers used to get meals elsewhere. Such meal vouchers are the subject of a separate exemption (see EIM16210).

The exemption covers most of the ways in which a company might provide free or subsidised meals for its directors or employees, either in a canteen or on the business premises, so long as meals or meal vouchers are available for the staff generally. If the exemption applies then all meals on a reasonable scale (see EIM21671) provided on the employer’s premises are exempt from tax. This means that if all employees may get a free or subsidised meal on the employer’s premises or in a canteen, or meal vouchers, then working lunches on a reasonable scale, provided on the employer’s premises, will also be exempt even if not all of the employees get the working lunches.

With effect from 6 April 2011, the exemption is prevented from applying where meals are provided in conjunction with salary sacrifice or flexible remuneration arrangements (see EIM21676 onwards).

See EIM21673 for examples of how the exemption works in practice.