A FTSE250 Company Secretary writes...
“Where UK resident NED board directors’ services are not being supplied via a service company and therefore their fees are being processed through the payroll with PAYE/NI withholding applied, how are companies applying PAYE and NI withholding on their expense claims in relation to their normal UK place of business?
In particular, are companies treating accommodation and meal expenses in relation to board meetings differently to travel expenses i.e. that at the accommodation and over the meal, board matters are formally discussed and therefore should not attract tax?”
My understanding (following advice received in July 2015), is that the Tax treatment of travel and subsistence costs for board members in relation to attendance at board meetings is dictated by the permanent workplace rules. Under HMRC guidance, there is no tax relief for any costs relating to ordinary commuting. In general terms, ordinary commuting means travel between home and a permanent workplace. A permanent workplace is a place that an employee regularly attends for the performance of the duties of that employment – This would include the place where Board meetings are regularly held or near where they are regularly held. These would will be considered a permanent workplace and no relief for costs relating to travel, accommodation and subsistence (such as evening meals) for the attendance at these board meetings is available (or indeed, any other travel from home to head office and vice versa). Because of this we gross up of payments of these ‘benefits’ and pay over the relevant taxation and therefore our NEDs do not need to do anything on tax return. As a point of interest, the ‘benefits’ will have to appear in the RemCo table in the annual report and so will show in addition to their base fees.