Incidental Overnight Expenses

Employees who stay away from home may incur incidental expenditure which under normal circumstances would not be available for tax relief.

Employers can pay tax free amounts of up to £5 a night for overnight stays away from home in the UK and up to £10 per night for overseas overnight stays.  This tax free amount is to cover the cost of laundry, telephone calls home, buying newspapers etc..  If the employer pays more than this limit then the whole amount becomes taxable on the employee.  It is important to ensure that the payments are for genuine trips in connection with employment and if the payment is made not for the purposes of covering incidental costs then the payment will not be exempt.

The employer can deduct the reimbursement as an expense thus saving tax on costs.

Cover the cost of laundry etc when you are working away.

This article was taken from our Pay Less Tax brochure – Summer 2012.

What You Can Claim As Business Expenses main page.

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