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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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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. In most cases, HMRC has agreed that a proportion of the FDA may be paid free of tax and NICs as representing the cost of necessary subsistence.

If they wish, airlines may use the benchmark rates (see EIM05250), instead of the tax/NIC free element of their FDA, 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. They must not, in addition, pay a tax/NIC free FDA for any part of any sector for which they opt to use the benchmark rates.

The benchmark 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 – including any agreed tax/NIC free element.