EMPLOYERS IN THE TRANSPORT SECTOR

Published 12 June 2019

​Recent surveys have found that there is still a volume of employers in the transport sector unwittingly flouting the rules in relation to overnight allowances.
 
Back in April 2017 changes made by HMRC to overnight subsistence allowances paid to lorry drivers mean an approval notice has to be applied for to continue paying the Industry Scale Rate.
 
The agreed haulage industry scale rate for overnight stays away from home is currently £34.90 or 75% of this figure (£26.20) where the driver uses a sleeper cab and incurs subsistence expenses after starting their journey.  These are the maximum amounts that can be paid free of Income Tax and NICs under the agreed industry scale rate.  Employers must apply to HMRC for an approval notice to use these rates.
 
An employer who chooses to pay more than the agreed industry scale rate will need to apply for an individual bespoke scale rate.
 
As an employer if you use either the agreed scale rate or an agreed bespoke rate, you will need to have a checking system in place in order to periodically randomly check expense claims.
 
You can also pay or reimburse employees incidental overnight expenditure where they incur additional incidental costs on journeys when staying away from home (up to £5 per night for overnight stays in the UK and up to £10 for overnight stays abroad). This is in addition to the arrangements detailed above.
 
Benchmark scale rate payments can of course still be used without an approval notice but are less than the agreed industry scale rates.