Taxman refuses to 'see sense' over overnight allowance change

George Barrow
February 22, 2017

HMRC has described industry opposition to its planned changes to overnight allowances from the new tax year as “a storm in a teacup”.

Overnight allowance means drivers with a sleeper cab can claim £26.20 for each night they are away. It covers items such as food, laundry and phone charges but not parking.

Hauliers in the scheme can make these payments to employees outside of payroll free of tax and National Insurance.

Currently drivers are typically asked to sign timesheets at the end of their shifts to signify they have been away in a sleeper cab and have incurred a cost.

However, from April 2017 HMRC will require employers to make random checks of receipts for such items. 

The RHA has opposed this and has challenged HMRC’s claim that the change is required by law.

“We are certain this is not the case and have challenged HMRC to explain what law requires this, which it has repeatedly failed to do,” said director of policy Jack Semple.

“This is a change that is opposed by all our members, from the smallest to the largest.”

Semple said the RHA would fight the decision, and win, at a tax tribunal if HMRC does not see sense. 

However, an HMRC spokesman said the new arrangement would be simple for hauliers to operate and that it was standard practice to show receipts to employers before claiming expenses.

“All employers have to do is carry out the checking of information that they or their employees should already hold as a matter of course,” he said.

The spokesman added that drivers would be able to take a photo of any receipts on their smartphones. 

“We are only expecting employees to retain their evidence for the period of the checking system that their employer applies.

“If the employer undertakes a check every month, then at the end of that month, if employees have not been asked to provide evidence of spending in the month, they could discard their records,” he said.

He added that the employer needs to retain evidence of the checks undertaken and any action taken as a result rather than the receipts themselves. 

Semple responded: “It is certainly a storm, but one of protest against an unthinking and unnecessary change to an HMRC system that has worked well for 26 years. 

“It shows HMRC to be out of touch, and careless of its statutory duty to regulate in a way that takes account of its effect on business.”

About the Author


George Barrow

George Barrow has been writing about nearly anything with wheels for the past 15 years, starting off his career in the car industry and ending up in commercial vehicles via a brief detour to cover technology, science and start-ups. Often found behind the wheel of a new product, his real interest lies in the business side of the automotive industry. George is the UK jury member of the International Van of the Year and International Pick-Up Award.

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