The rising cost of living has meant that food has become a lot more expensive in recent years. In an effort to ease the burden on their employees, many workplaces are providing meals for their team, often taking advantage of being able to bulk buy; however, this can cause confusion around accounting, with employers wondering whether this can be offset against taxes and employees wondering whether this should be counted as part of their income for tax purposes.
Exemption
Often, meals for a work team are counted as a tax and NI-free perk; however, for this to apply, certain conditions need to be met. If the meals are prepared by a canteen providing either for all employees or for those employees at a particular location, they are exempt.
Another example of meals that are exempt is that the meals are served on the business premises, even if they are made elsewhere. They must also be on a reasonable scale and be available to all employees or all employees at a particular location. If they are served in a dining room or restaurant where members of the public may also be eating, the employees’ meals must be served in a designated part for employees only. A good example of this type of meal is an office lunch delivery from a company such as https://www.crumbsdelivered.co.uk/shop/office-lunch-delivery.
If meals are only for selected employees, they are usually considered a taxable benefit. An exception to this is if the meal is taken during work-related training when the employee must travel away from their usual workplace to attend.
Tea and coffee
Free tea, coffee, and other drinks, perhaps accompanied by biscuits, count as trivial benefits. These can be provided limitlessly without having to worry about tax or NI.
Seek advice if necessary
While meals offered to all employees generally count as a perk, with tax not deductible for the employer and not counted for tax purposes for the employee, you should consult your accountant if you are in doubt about the validity of any expenses.