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Although HMRC suggests that subsistence and cleaning would normally be the sort of expense covered by a scale rate, Ross Martin says, "I can see no reason why employer should not use scale rates across the board for other expenses particular those of travel and accommodation, especially when employees are incurring similar costs on a regular basis. HMRC allow this practice for overseas travel expenses after all."

She cites the following as an example where a scale rate payment described in EIM05200 might apply in practice:

The firm of Accountants-R-Us LLP (ARU) is based in Guildford, Surrey. It has many clients in central London, and it constantly reimburses staff for their travel between the office and central London.

Under the current system, staff submit monthly travel and subsistence expense claims (with receipts). Applying HMRC’s new guidance, ARU sets a scale rate payment for London journeys by taking the average of a random sample of 10 per cent of employees’ expenses claims for a month. It pays this rate for each journey without any need for a full expense claim (or receipts).

Overseas business travel 

ARU, could also set the scale rate to cover travel, subsistence and even accommodation for journeys in the UK. Employees would then only need to be able to quantify their business trips and be paid the agreed rate.

HMRC did not make a fuss of the changes made to its UK scale rates guidance and the relevant hyperlinks to its site from the manual updates section are not working.

What has been well publicised though are changes made in the case of overseas business travel. A set of benchmark scale rate has been published in a set of tables, with detailed to assist employer calculations.

“Perhaps the next question for HMRC to answer under the FOI should be: what controls do you have in creating your own scale rates? But, then again, is that not something that the National Audit Office should be asking instead?" she added.

Director of Finance Online has a Special Report on business expenses available here.

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Related links 

• UHY Hacker Young
• HM Revenue & Customs
• AccountingWeb.co.uk
• HMRC - New guidance on subsistence and scale rate payments