What is the tax-free overnight subsistence allowance which may be available to employed lorry drivers?

This is a freeview 'At a glance' guide to the tax-free overnight subsistence allowance which may be available to employed lorry drivers.

At a glance

The rate is £34.90.

  • This allowance is payable by employers when drivers have to spend the night away from home and their permanent workplace (if any).
  • The cost of meals is included in the overnight rate. Employers should not also pay or reimburse the cost of these meals on either an ‘actuals’ basis or using the benchmark rates.
  • Where drivers have a sleeper cab 75% of the allowance (£26.20) may be paid. An HMRC approval notice must be applied for by the employer.
  • The allowance is subject to the rules in sections 337 and 338 ITEPA 2003.
    • A driver can make a claim for a deduction under the legislation where employer payments are fully taxed through PAYE, do not cover the full cost of the expenses, or are not reimbursed at all.
  • This allowance is NOT available to self-employed individuals.

Employers can also agree their own scale rate with HMRC.

Where the employer knows that the driver uses their sleeper cab, the amount paid free of tax should not exceed a reasonable reimbursement of:

  • Evening meal and breakfast.
  • Washing facilities.
  • Upkeep of bedding in the cab.

Where the employer chooses to also pay for the driver's lunch this will not be taxable where:

  • The payment does not exceed £2.00 a day, and
  • The driver is obliged to take their lunch away from their home or their permanent workplace.

A similar rule is also available for bus/coach drivers.

Useful guides on this topic

Subsistence (employees)
Can employees claim tax relief for subsistence? How do you make a claim?

Subsistence (employer's guide)
Subsistence is the tax term for food and drink. What can be claimed? What are the rules for employer intermediaries? How do claims affect VAT, NICs and Income Tax?

Travel (summary for employees)
What expenses can your employer reimburse? How might travel expenses affect Income Tax and National Insurance Contributions? What journeys are allowable for tax relief?

Travel (employer's guide)
How do employers apply the tax rules to travel costs? What is available for subsistence costs? What are the rules on home-to-work travel?

External link

HMRC lorry drivers subsistence allowance: EIM66110.

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