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HMRC internal manual

Employment Income Manual

Employment income: scale rate expenses payments: accommodation and subsistence payments to employees travelling outside the UK: Airline employees: relationship with Flight Duty Allowances

Most airlines have established arrangements under which they pay Flight Duty Allowances (FDAs - sometimes known as Sector Allowances) to their flight crews. These allowances are intended to cover expenses which those employees incur whilst travelling – whether in the UK or abroad. From April 2016, these payments must be made as a bespoke rate under the terms of an approval notice, and employers must also have checking systems in place to ensure that payments are only made on qualifying occasions.  

If they wish, airlines may use the benchmark scale rates, instead of  a bespoke rate, as a means of paying or reimbursing the subsistence expenses of employees on long-haul flights who fly to and stay at destinations outside the UK. Employers using the benchmark rates must also have a checking system in place to ensure that payments are only made on qualifying occasions. They must not, in addition, pay a tax/NICs free FDA for any part of any sector for which they opt to use the benchmark rates.

The benchmark scale rates are intended for use when employees have to spend more than 5 hours at the overseas destination. So, airlines will not normally be able to use them in cases where aircrew on short-haul flights remain within the overseas airport until they leave on the outbound flight. They may however continue to pay a FDA, subject to operating them in accordance with their approval notice.