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HMRC internal manual

National Insurance Manual

Class 1 NICs : Expenses and allowances : Incidental overnight expenses (previously Personal incidental expenses or PIEs) : Introduction

Employees who stay away from home overnight on business may spend money on items suchas private telephone calls, laundry services and newspapers. Many employers will meet thecost, or some of the cost, of such expenses or reimburse the employee.

Until 6 4 2003 tax legislation contained within the Income and Corporation Taxes Act1988 (ICTA 1988) referred to such expenses as personal incidental expenses (PIEs). As partof the tax law rewrite of Schedule E legislation these personal incidental expenses werere-named. With effect from 6 April 2003 the Income Tax (Earnings and Pensions) Act 2003(ITEPA 2003) refers to them as ‘incidental overnight expenses’. Despite the change of namethe type of expense remains as described above.

Incidental overnight expenses (formerly PIEs) cannot be excluded from liability for NICsunder the travel rules as they are not incurred while travelling. See NIM06250 for general information regarding the travel rules.

These payments have, however, been excluded from NIC liability since April 1995 in linewith the tax treatment which from April 2003 is provided for by section 240 of the IncomeTax (Employment and Pensions) Act 2003 (ITEPA 2003) from April 2003, and was previouslycovered by section 200A of the Income and Corporation Taxes Act 1988 (ICTA 1988).

Incidental overnight expenses can be provided in a variety of forms, including cash,vouchers (see NIM02416) and benefits. The exemption applies nomatter how the incidental overnight expense or PIE is provided.

For guidance on the NICs position:

It should be noted that the change occurring on 6 April 2004 was consequential only.

For guidance on the tax position see:

  • SE02710 regarding periods before 6 April 2003
  • EIM02710 regarding periods from 6 April 2003.