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HMRC internal manual

Employment Income Manual

Tax treatment of lorry drivers: subsistence allowances paid to lorry drivers: lorries with sleeper cabs

Where the employer is satisfied that the employee necessarily incurred expenses as a result of a night spent away from home and his or her permanent workplace (if any), HMRC accepts that a payment of 75% of the figure shown at EIM66110 does no more than reimburse the expense incurred when the driver uses their sleeper cab overnight.

Employers can apply to HMRC for an approval notice (see EIM30255) to use this rate, confirming that they have a procedure in place to check that:

  • the employees were away from their normal place of work or home in the performance of their duties; and
  • actually incurred and paid subsistence costs when away from their normal place of work or home   

For details of the evidence that can be considered in support of a drivers expenses see EIM66120.

Payments in excess of this amount may only be paid tax-free where the employer has a bespoke rate agreed with HMRC on an approval notice. See EIM66115.

The mere fact that a lorry has a sleeper cab does not prevent the employer paying an amount tax free up to the limit shown in EIM66110 provided that the employer is satisfied that the driver did incur expenses on overnight accommodation (for example by staying in a hotel) and meals.

Where the employer knows that the driver uses their sleeper cab, the amount paid free of tax should not exceed a reasonable reimbursement of:

  • evening meal and breakfast
  • washing facilities
  • upkeep of bedding in the cab

The employer must take all necessary steps to be satisfied that any amounts paid free of tax are no more than a reasonable reimbursement of the expenses the driver incurred while staying overnight away from home and the permanent workplace (if any).

Employers paying an overnight rate for drivers who spend nights away from home should remember that an employee can only be reimbursed for the cost of a meal once. As the cost of meals is included in the overnight rate, employers should not also pay or reimburse the cost of these meals on either an ‘actuals’ basis or using the benchmark rates.