Incidental overnight expenses

Our team of experts explain how to treat these expenses when reporting to HMRC

Our experts at DSR Tax Claims know how hard it is to find good, quality information about HMRC’s tax regulations that is easy to understand, and that’s why we have created these handy guides to tell you everything you need to know. Our aim is to make life easier for our clients and that is why we want to share our expertise with you. You can also call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

What can be classed as an incidental overnight expense?

As an employer, you might ask your employees to travel for business purposes and sometimes this business travel will require an overnight stay. Incidental overnight expenses include the things your employees need to buy while they are away from home, which they would normally provide for themselves if they were within their home environment. So, as far as HMRC are concerned, these expenses might include such things as buying newspapers, laundry costs, which they would normally take care of at home but can’t because they are staying in a hotel, or maybe phone calls home which wouldn’t be necessary were they not travelling for business.

Are there any exemptions?

As long as the total cost of the expenses you pick up is £5 or less for travel within the UK or £10 for travel outside the UK, there is no need for you to report this to HMRC and there would be no additional tax or National Insurance to pay.

These exemptions are valid no matter how the expense is paid for. So this means that the expenses can be paid for by a company credit card, a non-cash voucher, by the employer paying directly or by a cash payment and they would still be classed as exempt by HMRC as long as they are within the threshold limit.

If these expenses are picked up as part of a salary sacrifice agreement then you would need to report them to HMRC.

How do you report and pay for these expenses?

If the expenses you are picking up the tab for aren’t exempt (that means above the £5/ £10 limit explained above), you need to report them to HMRC and there might be additional PAYE tax and National Insurance to pay on them.

For expenses above those thresholds, you need to report them to HMRC on your P11D form and then you will need to deduct and pay PAYE tax and Class 1 National Insurance through your payroll, including the full amount you are paying in expenses and not just the amount above the threshold.

If the expenses form part of a salary sacrifice arrangements and the amount of salary given up is greater than the cost of the expenses, you need to report the salary amount to HMRC instead. This only applies to salary sacrifice arrangements made after 6th April 2017.

How can DSR Tax Claims help?

We aim to make life as simple as possible for our clients and that includes giving you the information you need to make your taxes (and your life) simpler and less stressful.  Our team of experts at DSR Tax Claims are always on hand to help our clients and our excellent standing with HMRC means that we can make sure you don’t fall foul of their regulations, while claiming your maximum tax relief. We can even take care of all that paperwork and deal with HMRC on your behalf too. Call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

This page was last updated on 07/11/2018.

Start Your Claim Today!

Call our experts

Let’s get started on your tax rebate or self-assessment return