HMRC gives ground in long-running row about overnight allowances


The RHA has claimed victory in its long running and increasingly bitter battle with the taxman about overnight allowances.

The decision to mandate random checks of receipts pertaining to drivers’ overnight allowance, paid to cover subsistence when drivers have to sleep in their cabs, from the current tax year degenerated into a war of words back in February.

However, in a statement issued today the trade association said HMRC had now issued new guidance, which means drivers won’t have to produce receipts totalling the exact amount payable under the overnight allowance.

It also means that other means of recording expenses, such as digital photographs on a smartphone will be acceptable to the tax authorities.  

“In a couple of key areas relating to the retaining and checking of receipts HMRC has now accepted that a simpler, more streamlined approach is acceptable.

“The guidance is much clearer about how operators can comply with tax inspector checking requirements so the potential for error is less likely,” the RHA said.

RHA chief executive Richard Burnett said: “This is a significant victory for the RHA’s campaign against this unnecessary piece of bureaucracy.

HMRC have listened to our arguments, and although we still believe this is still too complex, we do now have a working factsheet that our members and HMRC advice staff will be able to understand so the new taxation regime can be more easily managed.”


RHA/HMRC Overnight Allowance Guidance
Question and Answers for Members

RHA Question 3

What is an individual “bespoke agreement”?

A. This is an agreement you enter into if you wish to pay above £26.20. HMRC will require you to justify the higher amount. The checks required are the same as the Industry Bespoke Allowance, known as the lorry driver’s overnight subsistence allowance

RHA Question 4

How do I apply for an approval notice?

A. There is an on line application form (the link will be provided in version 2 of this document).

RHA Question 5

Do I have to get my drivers to send me their meal photos – I rather they got paper receipts?

A. When a driver is selected by you for a sample review you must satisfy yourself that they had been away from base on the night the claim relates and that they incurred the cost of food and drink. You need therefore to see evidence that a meal was bought which could be a receipt or if not then HMRC will accept a photo of the meal which shows a time and date

RHA Question 6

How long do I have to keep the evidence that my drivers have taken meals etc?

A: The drivers are required to keep the evidence until you have reviewed the period to be reviewed. If the driver is selected for review then that evidence must be passed to you to check. You can either keep this evidence or prepare a spreadsheet showing who was selected for review and detail of the evidence they provided which states what you saw and the amount of the claim

RHA Question 7

I have a bespoke agreement with HMRC which I set up after all this started – what should I do now?

A: You can now pay the £26.20 gross to the drivers subject you undertaking the prescribed level of checking set out by HMRC

RHA Question 8

I currently give my drivers £26.20 as before and take the tax and NI portion of that against my business – can I claim this back – have I done the wrong thing?

A: If you did not want to have a bespoke agreement then what you have done is ok but if you could get the evidence from the driver's ( based on the required sample) it would save you and your driver's cost and administration to enter into a bespoke agreement .

RHA Question 9

I pay my drivers £26.20 but tax them at source so they actually got less in their take home pay – what should I do now?