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HMRC internal manual

National Insurance Manual

HM Revenue & Customs
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Class 1 NICs: Expenses and allowances: Lorry drivers - subsistence allowances

The payment reimburses the long distance lorry driver for

  • the expense of overnight accommodation at a transport hotel or other similar establishment; or
  • the cost of expenses incurred if they use a sleeper cab.

Overnight accommodation

The normal travel rules apply. See NIM06250.

As a general guideline, the employer must have evidence available to show that the employee

  • spent the night away from home and any permanent workplace, and
  • the amount paid was reasonable reimbursement of the costs of accommodation and subsistence resulting from the business journey.

HMRC has an agreement with the Road Haulage Association over the level of overnight subsistence and the rates are reviewed annually. See EIM66110, previously SE66110 for details of the agreed rates.

As long as the employer makes an overnight payment in line with the nationally agreed rates you should accept that no NICs are due on the overnight subsistence element of any payment.

Where a round sum allowance is paid only those amounts which can be identified as a business expense will be excluded from liability for NICs. See NIM06160 for general guidance on round sum allowances.

Sleeper cabs

Drivers now regularly use sleeper cabs in preference to alternative accommodation when away from home. However, they still receive a general overnight subsistence payment. This payment is intended to cover the cost of

  • an evening meal and breakfast
  • washing facilities
  • upkeep of bedding in the cab. Paragraph 5B(e) of Part 5 excludes from Class 1 NICs liability meal vouchers in respect of which no liability to income tax arises by virtue of section 266(3) of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003). - see NIM02431. Section 266(3) excludes meal vouchers provided for employees by an employer if the voucher can only be used to obtain anything that is exempt from tax by virtue of section 317 of ITEPA 2003. Section 317 ITEPA 2003 exempts the direct provision by employers of subsidised meals, providing certain conditions are met. See EIM 21672 for guidance on the conditions contained in section 317 ITEPA.

We accept that 75% of the nationally agreed overnight subsistence payment made to lorry drivers using sleeper cabs represents reasonable reimbursement and can therefore be disregarded for both tax and NICs purposes.

If more than this amount is paid and reasonable evidence is available to show that additional sums have been incurred these can also be accepted as business expenses. See NIM05020 for general guidance on what constitutes a business expense.