O Little Tax of Bethlehem – Subsistance Scale Rates

I read somewhere that if you are a parent who blogs it is the law to write about your child’s nativity play at this time of year. Not wanting to anger the blogging gods here is my effort!

Nativity and taxation

Nativity and taxation

So it all started the day before, when Mrs TTF asked me if I had made the costume for Jabo’s (#1 Son) first appearance.

My natural reaction was to look at her with an expression that I have perfected over the years. It’s a mixture of confusion, denial and defence. Imagine a donkey entering a gurning competition and you will be about right. The next stage was to huff and then run off to find materials…..then run back to find out what part he was playing.

After some extensive research it turns out that in biblical days shepherds wore a pillow case with three badly cut holes for head and arms. This is topped off with the obligatory tea towel. Job done!

The next day after cancelling a few meetings (it appears that your child’s nativity play is a great way to get out of things) I took Jabo to school and was relieved that, somehow, there were children with worse costumes! We were mid range between the parents who have too much time on their hands and those who completely forgot and were left with the schools lost property box to chose from. I’m sure they will have psychological issues later in life.

After losing out on the front row me and Mrs TTF stood at the back with some other parents who reciprocated pretended to know who I was. Then it happened….I turned into one of those parents who waves at their children on stage in the vain hope that Jabo would see me. Then cooing over him doing a little dance routine. I look back and cringe but I was completely caught up in the moment. I’m sure that next year I will be blogging about the same thing but hopefully I will show some self-control!

The play was good it consisted of some people having a baby and some kings, shepherds and animals following a star and dishing out presents. You know the routine no room at the inn and all that. But had the lucky people who secured accommodation considered the tax implications of claiming expenses for the staying the night Bethlehem?


An employer in the UK is entitled to pay a tax free scale rate for subsistence to an employee when travelling in the performance of their duties. For UK duties the employer can use a benchmark scale. This must be agreed in advance through a PAYE dispensation usually by ticking the box on form P11dx. The benchmark scale charges are:

Breakfast rate £5
One meal (5 hour) rate £5
Two meal (10 hour) rate £10
Late evening meal rate £15

If you can prove to HMRC that these costs would be higher by carrying out a sampling exercise then it would be possible to agree separate figures with them. In all cases the expense must have been incurred but no receipts are required after the scale rate has been agreed.

If the employee is travelling overseas the costs will obviously be different depending on what country is being visited. HMRC therefore allow an employer to use the foreign offices rates to calculate the benchmark. The rates per country can be found on HMRC’s website.

Assuming that on their way to Bethlehem the wise men had a stop over in Tel Aviv they would be able to claim the following per night:

Room rate: $178.5
Lunch: $27.5
Dinner: $41.5
Other: $7.0
Drinks: $8.5
Hotel to Stable: $8.0

An expense claim would be needed and expenses incurred but no receipts would be required. This is designed to ensure that relief is available where it is difficult to obtain receipts.

So now that I have taken care of the Nativity tax issues I just need to work out where Mrs TTF bought our pillow cases before she finds out that they are now an integral part of the dressing up box!

By Peter Cross

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