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HMRC internal manual

Compliance Operational Guidance

HM Revenue & Customs
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Supporting Guidance: employer compliance: guidance by subject: expenses, benefits and pecuniary liabilities: incidental overnight expenses (IOEs)

When employees stay away from home, employers may make tax and NICs free payments to meet the cost, or part of the cost of expenses such as newspapers and laundry services. Prior to 6 April 2003 such payments were known as personal incidental expenses or PIEs.

With effect from 6 April 2003 they became known as Incidental Overnight Expenses (IOEs).

You should familiarise yourself with the guidance at:

  • EIM02710 onwards
  • NIM06010 onwards.

The terms of the exemption in EIM02730 are such that, if an employer pays incidental overnight expenses in excess of the maximum amount allowable then the whole payment is taxable and liable to NICs.