Luncheon Vouchers in the UK: What Happened to Them
Luncheon vouchers lost their 15p-a-day tax relief from 6 April 2013. How UK meal vouchers are taxed today and what employers use instead, from gov.uk sources.
Luncheon vouchers were vouchers employers gave staff to spend on meals, and the first 15p of each working day's voucher was free of income tax and National Insurance. That relief ended for vouchers provided on or after 6 April 2013, after Finance Act 2012 repealed it. Employers can still give staff meal vouchers, but there is no voucher allowance any more: a voucher for meals outside the workplace is reported on form P11D and carries Class 1 National Insurance.
Key takeaways
- The voucher relief dated from 1946, was worth 15p a working day by the end, and was repealed for vouchers provided on or after 6 April 2013.
- A meal voucher for use outside the workplace goes on form P11D and carries Class 1 National Insurance through payroll. A voucher exchangeable for cash, or a cash meal allowance, is taxed as earnings through PAYE.
- The canteen exemption covers meals in a canteen or on the employer's premises that are open to all staff, and only when strict conditions are met.
What were luncheon vouchers?
Luncheon vouchers were vouchers an employer gave staff to spend on a meal on working days. HMRC's impact note on their repeal records that the tax relief "was introduced in 1946 when food rationing was in place with the objective of helping individuals afford healthy meals" (HMRC, Luncheon Vouchers: Repeal of Relief). In its final form it was section 89 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA).
The relief was narrow. The vouchers' taxable value was reduced by 15p for each working day, and only if they were non-transferable, used for meals only, used on days the employee was at work and, where their issue was restricted, available to lower-paid staff (HMRC manual EIM16210). Any value above 15p a day was taxable. National Insurance had a matching disregard of 15p a working day, up to £1.05 a week (NIM02437).
What happened to luncheon vouchers in the UK?
The relief lost its value over time. HMRC's impact note says its benefit "has been almost entirely eroded by inflation" and that it "no longer achieves a clear objective"; it was among the reliefs abolished after the Office of Tax Simplification's review.
The same note estimated that 15,000 to 20,000 taxpayers still received luncheon vouchers, from over 600 employers, mostly smaller firms without workplace canteens. For a basic-rate taxpayer, losing the relief added about £12 a year in tax and National Insurance.
The repeal itself is Finance Act 2012, Schedule 39, paragraph 50: "Section 89 of ITEPA 2003 (reduction for meal vouchers) is repealed", with effect "for the tax year 2013-14 and subsequent tax years". HMRC's manual confirms the date (EIM02650). The National Insurance disregard was removed from the same date by regulations that came into force on 6 April 2013, and HMRC's manual now says "the full cost of all meal vouchers are now to be included as earnings for the purposes of calculating NICs liability" (NIM02437).
So the vouchers were not banned; the tax break was removed. gov.uk's current employer guidance still covers vouchers for meals outside the workplace.
How is a meal voucher taxed today?
In tax terms, a meal voucher that can only be exchanged for food is a non-cash voucher, which HMRC describes as "any voucher, stamp or similar document or token" that can be exchanged for goods or services (EIM16040). What the employer reports and pays depends on what the voucher can be swapped for. gov.uk's guidance on meals for employees says:
- Vouchers for meals outside the workplace. The employer must "report them on form P11D" and "deduct and pay Class 1 National Insurance on the value of the vouchers through payroll". The general vouchers guidance adds that this is Class 1 "(but not PAYE tax)": the value is reported on the P11D instead.
- Vouchers that can be exchanged for either food or cash. These count as earnings, as do cash allowances for meals. The employer must "add the amount to the employee's other earnings" and "deduct and pay PAYE tax and Class 1 National Insurance through payroll".
- Vouchers for meals in a workplace canteen. When offered to all employees, gov.uk's exemption covers "free or subsidised meals of a reasonable value at a workplace canteen" and "vouchers that cover the cost of buying these meals". The exemption is for canteen meals only (EIM16105); a voucher spent anywhere else falls under the first bullet.
Salary sacrifice does not help: "If you offer these meals or vouchers under salary sacrifice or flexible remuneration arrangements (also known as 'flexible benefit plans'), these will not be exempt."
What do UK employers use instead?
Employers who want to feed staff now choose between three broad options. The UK employee meal benefits tax guide covers the detailed rules for each.
| Option | How it works | Tax position | Where to read more |
|---|---|---|---|
| Meal vouchers | A voucher or token staff exchange for food outside the workplace | Taxable: P11D, plus Class 1 National Insurance through payroll | gov.uk vouchers guidance; tax guide |
| Meal allowance | A set amount for food, paid as cash with salary or held as a budget the employer pays against | A cash allowance is earnings: PAYE and Class 1 through payroll. A budget the employer pays for directly is in almost all cases a taxable benefit in kind | Tax guide; meal allowance policy; meal budgets |
| Meals provided at work for all staff | Free or subsidised meals in a canteen or on the employer's premises | Exempt only if every condition is met | Tax guide; employee meal programmes |
Under the canteen exemption, meals provided in a canteen or on the employer's premises are free of tax only when they are on a reasonable scale, available to all employees (or all at a particular location) and not provided through salary sacrifice or flexible remuneration (EIM21671). The tax guide covers this and the other, narrower exemptions.
How a meal budget works on a platform
A meal budget is another name for a meal allowance. Where the employer pays for the meals ordered, it is in almost all cases a taxable benefit in kind, as the tax guide explains. On Ordit, the employer sets the rules in the Admin Portal: an amount per person or team, by office, by day of the week or by time of day. Employees order lunch from the restaurants that deliver to their office, the limit is enforced at checkout and, if the employer allows it, anything above the budget goes on the employee's own card. There are no receipts or expense claims. Every order lands on one monthly invoice with 30-day terms, with spend reported by employee, team or expense code: the per-person record that benefit reporting needs.
Where the meals are not exempt, gov.uk says the employer "may have to report them to HM Revenue and Customs (HMRC) and deduct and pay tax and National Insurance on the costs" (gov.uk). The tax guide sets out how employers report a daily budget and settle the tax; the complete guide to employee meal programmes covers budget levels and rollout.
Replacing vouchers with a meal budget?
This article is general guidance for UK employers, current as of November 2026. It is not tax advice — confirm your programme's treatment with your accountant or payroll advisor before launch.
Last reviewed: 12 November 2026.
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