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As an employer providing incidental overnight expenses to your employees, you have certain tax, National Insurance and reporting obligations.

What鈥檚 included

鈥業ncidental overnight expenses鈥� are personal (non-business) expenses incurred by an employee while travelling overnight on business.

Examples of incidental expenses are:

• buying newspapers
• paying for laundry
• phoning home

You don鈥檛 have to report or pay anything to HM Revenue and Customs (HMRC) if you pay no more than:

• 拢5 per night for travel within the UK
• 拢10 per night for travel outside of the UK

Salary sacrifice arrangements

You do have to report the incidental overnight expenses if they are part of a salary sacrifice arrangement.

If any of the overnight expenses you cover aren鈥檛 exempt, you may have to report the costs to HM Revenue and Customs (HMRC), and deduct and pay tax and National Insurance on them.

For expenses above the 拢5 or 拢10 threshold, you must:

• report them on form P11D
• deduct and pay PAYE tax and Class 1 National Insurance through your payroll - use the full amount that you pay to your employee, not just the amount above the 拢5 or 拢10 threshold

Salary sacrifice arrangements

If the costs are less than the amount of salary given up, report the salary amount instead.

These rules don鈥檛 apply to arrangements made before 6 April 2017 - check when the rules will change.

The following guide contains more detailed information: