Employment income: scale rate expenses payments: accommodation and subsistence payments to employees travelling outside the UK

Subsistence expenses are a common example of expenses which employers choose to reimburse by means of a scale rate payment. The Employment Income manual (EIM) contains guidance about the evidence HM Revenue & Customs (HMRC) may require in support of a dispensation request for scale rate subsistence payments to employees travelling within the UK.

Read more about scale rate expenses payments in the Employment Income Manual

The sampling technique described in the EIM is not usually appropriate for employees who travel outside the UK, because most employers will not have enough internationally mobile employees to enable them to undertake a meaningful sampling exercise.

HMRC therefore agreed in January 2008 that employers may use benchmark rates published on the HMRC website when paying accommodation and subsistence expenses to employees whose duties require them to travel abroad, without the need for the employees to produce expenses receipts. HMRC will endeavour to update the published rates in October/November each year.

Benchmark scale rate expenses payments: accommodation and subsistence payments to employees travelling outside the UK - Tables (October 2013) (PDF 282K)

Benchmark scale rate expenses payments: accommodation and subsistence payments to employees travelling outside the UK - Tables (October 2012) (PDF 158K)

Accommodation and subsistence payments at or below the published rates will not be liable for Income Tax or National Insurance contributions (NICs) for employees who travel abroad, and employers need not include them on forms P11D. However, if an employer decides to pay less than the published rates their employees are not automatically entitled to tax relief for the shortfall. They can only obtain relief under the employee travel rules (see EIM31800 onwards) for their actual, vouched expenses, less any amounts paid by their employer. By 'vouched expenses' we mean expenses which are supported by receipts, or some other existing record of the amounts spent.

Read EIM31800: General: table of contents

Whilst most rates are published in the local currency, or are consistently in either US dollars or Euro, there are a number of countries where we have published a room rate in either US dollars or Euro and the over 5 hour, 10 hour and residual rates in the local currency. The 24 hour rate will show both currencies in these cases.

These tax/NICs free amounts are in addition to the incidental overnight expenses that employers may reimburse tax/NICs free under Section 240 ITEPA 2003 and the corresponding NICs disregard (see EIM02710 and NIM06015).

EIM02710: Exemption from charge

NIM06015: Introduction

Employers are not obliged to use the published rates. It is always open to an employer to reimburse their employees' actual, vouched expenses, or to negotiate a scale rate amount which they believe more accurately reflects their employees' spending patterns. Employers wishing to negotiate such an amount must of course be able provide HMRC with evidence in support of their figures.

Further guidance can be found in the Employment Income manual.

EIM05255 What the tables contain

EIM05260 How to use the benchmark rates

EIM05265 Employee staying as guest of a private individual

EIM05270 Employee receiving free meals and accommodation

EIM05275 Employee staying in vacant residential property

EIM05277 Airline employees - relationship with Flight Duty Allowances

EIM05280 Examples