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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

Income and Corporation Taxes Act 1988

 Income Tax (Earnings and Pensions) Act 2003

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


Until 6 April 2003 tax legislation contained within ICTA 1988 referred to such expenses as personal incidental expenses (PIEs). As part of the tax law rewrite of Schedule E legislation these personal incidental expenses were re-named. With effect from 6 April 2003 ITEPA 2003 refers to them as ‘incidental overnight expenses’. Despite the change of name the type of expense remains as described above.

Incidental overnight expenses (formerly PIEs) cannot be excluded from liability for NICs under 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 line with the tax treatment which from April 2003 is provided for by section 240 of ITEPA 2003 from April 2003, and was previously covered by section 200A of ICTA 1988.

Incidental overnight expenses can be provided in a variety of forms, including cash, vouchers (see NIM02416) and benefits. The exemption applies no matter 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.