The overnight figure
EIM66110 sets the amount HMRC "should be accepted as doing no more than reimburse the expenses of accommodation and subsistence in the United Kingdom": £34.90 per night from 1 January 2013. That figure has not been raised in the manual since. EIM66130 covers sleeper cabs: "HMRC accepts that a payment of 75% of the figure shown at EIM66110 does no more than reimburse the expense incurred when the driver uses their sleeper cab overnight", which is £26.18. The 75 percent is for "evening meal and breakfast, washing facilities, upkeep of bedding in the cab"; the full £34.90 can still be paid tax-free to a sleeper-cab driver who in fact stayed in a hotel, "provided that the employer is satisfied that the driver did incur expenses on overnight accommodation".
The conditions for paying it tax-free
Since 6 April 2017 employers pay or reimburse subsistence under the exemption for paid or reimbursed expenses in sections 289A and 289B ITEPA 2003 (EIM66105). A payment is exempt if it is made "in an approved way", meaning at the benchmark rates in the Income Tax (Approved Expenses) Regulations 2015 or at a bespoke rate agreed with HMRC on an approval notice, and if the driver was actually on qualifying travel. For the industry overnight figure and any bespoke rate the employer must operate a checking system: EIM66130 says the employer must confirm "that the employees were away from their normal place of work or home in the performance of their duties; and actually incurred and paid subsistence costs when away". For benchmark rates only, from 6 April 2019 "employers will only be required to ensure that employees are undertaking qualifying travel on occasions in respect of which a payment is made or reimbursed" (EIM66100).
EIM66115: an employer wanting to pay more than the benchmark rates or the sleeper cab rate "may apply for an approval notice for use of an individual bespoke scale rate". Anything paid above the approved amount without a notice "should be subjected to tax and NICs as earnings from the employment". EIM66100 adds that where "an additional round sum payment is made it is chargeable to tax and NICs": a flat "night out bonus" on top of subsistence is pay.
Meals on the day: the benchmark scale rates
EIM30240 sets the maximum tax-free meal allowances an employer may pay without prior HMRC approval, by the length of the journey:
| Minimum journey time | Maximum meal allowance |
|---|---|
| 5 hours | £5 |
| 10 hours | £10 |
| 15 hours, and ongoing at 8pm | £25 |
"Where a scale rate of £5 or £10 is paid and the qualifying journey in respect of which it is paid lasts beyond 8pm a supplementary rate of £10 can be paid." A meal "would take a normal dictionary meaning", a combination of food and drink. The rates are maximums; an employer can pay less, and drivers who regularly start early or finish late may be paid the 5 or 10 hour rate if the other conditions are met.
Worked examples
Example 1. A tramper is out four nights a week, sleeping in the cab. The employer pays £26.18 a night (75 percent of £34.90) under a checking procedure and an approval notice: £104.72 a week free of tax and NIC. If the employer paid £35 a night for cab nights without a bespoke agreement, £8.82 a night would be taxable.
Example 2. A day driver on a 12-hour shift with no night out. The employer may pay a £10 meal allowance tax-free under the benchmark rates, and a further £10 if the shift runs past 8pm.
Example 3. A driver stays in a hotel two nights on a Scottish run. The employer reimburses the actual hotel bill and meals with receipts: fully exempt as reimbursed expenses, no scale rate needed.
Removal crews
EIM66100 notes that removal vans commonly carry a driver and a porter, and "the porter may receive tax-free subsistence payments on the same basis as the driver".
Self-employed and owner-drivers
The EIM rules are about employees. A self-employed owner-driver claims actual subsistence costs as business expenses on the self-assessment return, subject to the ordinary rules on travel in the course of a trade; there is no £34.90 flat rate for the self-employed. Fuel, maintenance, insurance, the operator licence and tachograph costs are business expenses in the usual way, and the cost per mile calculator is built to add them up. Overnight parking, at the sites in the lorry parking directory and the motorway services directory, is a business expense for the self-employed and a reimbursable one for employees.
Common mistakes
- Paying a round-sum "night out" on top of subsistence and treating all of it as tax-free. The round sum is earnings.
- Paying the full £34.90 for a cab night without evidence of hotel expenses. The sleeper cab figure is 75 percent.
- Paying above the benchmark rates with no approval notice.
- No checking system. Bespoke and industry rates still require one; only the benchmark rates were relieved of it in 2019.
- Assuming the rate rises each year. The £34.90 in the manual dates from 2013; check the manual, not a forum, for the current figure.
This page describes HMRC’s published position for employers and drivers. It is not tax advice for a particular case; the manual references above are the place to check, and an accountant who works with hauliers knows the approval-notice route.