HMRC internal manual

Employment Income Manual

Exemption for amounts which would otherwise be deductible: international travel


Employers with employees who travel outside of the United Kingdom in the performance of the duties of their employment can continue to pay or reimburse their employees up to the HMRC published worldwide subsistence rates (see EIM05250) without needing to apply the terms of the exemption.

Where employers wish to pay or reimburse at rates in excess of the HMRC published rates they will need to either deduct tax and NICs on the excess over the published rate, or apply for a bespoke rate in accordance with the guidance at EIM30250 and will be required to undertake a sampling exercise in order to agree rates with HMRC. Employers using bespoke rates for international travel will also need to maintain appropriate checking systems. See EIM30270.

If an employer decides to pay less than the published rates its 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 contemporaneous record of the amounts spent.

Incidental overnight expenses

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).

Travel costs

The exemption also applies to travelling and subsistence expenses incurred on international journeys provided that the expenses would be fully allowable under the legislation for international travel Chapters 2 and 5 of Part 5 ITEPA 2003. See EIM34001.