NIM06015 - Class 1 NICs : Expenses and allowances : Incidental overnight expenses (previously Personal incidental expenses or PIEs) : Introduction
Employees who stay away from home overnight on business may spend money on items such as private telephone calls, laundry services and newspapers. Many employers will meet the cost, or some of the cost, of such expenses or reimburse the employee.
Until 6 4 2003 tax legislation contained within the Income and
Corporation Taxes Act 1988 (ICTA 1988) referred to such expenses as
personal incidental expenses (PIEs). As part of the tax law rewrite
of Schedule E legislation these personal incidental expenses were
re-named. With effect from 6 April 2003 the Income Tax (Earnings
and Pensions) Act 2003 (ITEPA 2003) refers to them as 'incidental
overnight expenses'. Despite the change of name the type of expense
remains as described above.
Incidental overnight expenses (formerly PIEs) cannot be
excluded from liability for NICs under the travel rules as they are
not incurred while travelling. See
NIM06250 for general information
regarding the travel rules.
These payments have, however, been excluded from NIC
liability since April 1995 in line with the tax treatment which
from April 2003 is provided for by section 240 of the Income Tax
(Employment and Pensions) Act 2003 (ITEPA 2003) from April 2003,
and was previously covered by section 200A of the Income and
Corporation Taxes Act 1988 (ICTA 1988).
Incidental overnight expenses can be provided in a variety of
forms, including cash, vouchers (see
NIM02416) and benefits. The exemption
applies no matter how the incidental overnight expense or PIE is
provided.
For guidance on the NICs position:
It should be noted that the change occurring on 6 April 2004 was
consequential only.
For guidance on the tax position see:
- SE02710 regarding periods before 6 April 2003
- EIM02710 regarding periods from 6 April 2003.
