Incidental overnight expenses

Produced by Tolley in association with Philip Rutherford
Incidental overnight expenses

The following Employment Tax guidance note Produced by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:

  • Incidental overnight expenses
  • Introduction
  • Incidental overnight expenses
  • Tax-free amounts
  • Excessive reimbursement
  • Working rule agreement
  • Reporting requirements

Introduction

Typically, if an employer reimburses an employee for personal expenditure when he is travelling for business reasons, these amounts would constitute a taxable benefit on the employee. As the expenditure is on personal items, they cannot be wholly, exclusively and necessarily for the purposes of the duties of the employment. See the Travel expenses and Subsistence expenses guidance notes for information on the main travel expenses.

There is a statutory exemption from tax and NIC for small amounts incurred by employees and reimbursed by an employer. The key feature of the exemption is that it must be reimbursed by the employer; the relief is not afforded to an employee who unilaterally incurs incidental costs without reimbursement. The purpose of the exemption is to remove burdensome administration from the employer over what should be trivial amounts of tax and NIC. The exemption relates to specific amounts incurred in certain circumstances, which are discussed below.

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