In the course of business travel an employee may incur costs that are not necessary costs of the journey. This might include the cost of private phone calls, laundry costs or newspapers. Payments by an employer to meet or reimburse such costs would normally be taxable and subject to Class 1 NICs.

However, where the business journey involves at least one overnight stay away from home the employer can pay amounts intended to meet such costs tax and NICs free up to a statutory maximum. The maximum is:

• £5 per night for nights in the UK and
• £10 per night for nights outside the UK.

Where the maximum is exceeded the full amount paid is taxable and subject to Class 1 NICs and not just the excess over the statutory maximum.

The statutory maximum is applied to the whole period an employee stays away from home and not to each night separately. This is shown by the example at EIM02770.

For more detailed guidance look at EIM02710 onwards and NIM06025.

Level 3 Table of Contents