Expenses and benefits: incidental overnight expenses

Overview

1. Overview

As an employer providing incidental overnight expenses to your employees, you have certain tax, National Insurance and reporting obligations.

What’s included

‘Incidental overnight expenses’ are personal (non-business) expenses incurred by an employee while travelling overnight on business.

Examples of incidental expenses are:

  • buying newspapers
  • paying for laundry
  • phoning home

What's exempt

2. What’s exempt

You don’t have to report or pay anything to HM Revenue and Customs (HMRC) if you pay no more than:

  • £5 per night for travel within the UK
  • £10 per night for travel outside of the UK

What to report and pay

3. What to report and pay

If any of the overnight expenses you cover aren’t exempt, you may have to report the costs to HM Revenue and Customs (HMRC), and deduct and pay tax and National Insurance on them.

For expenses above the £5 or £10 threshold, you must:

  • report them on form P11D
  • deduct and pay PAYE tax and Class 1 National Insurance through your payroll – use the full amount that you pay to your employee, not just the amount above the £5 or £10 threshold

Technical guidance

4. Technical guidance

The following guide contains more detailed information:

Was this article helpful?

Related Articles