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Long-distancei.,
Page 30
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drivers normally receive a payment for each period spent away from base.
The payment includes a subsistence element and sometimes a round sum payment, which is taxable.
This subsistence allowance is not taxable if two conditions are met: • Documentary evidence that the employee spent the night away as a necessary result of a business journey to a temporary workplace or in the performance of employment. • The amounts paid are no more than reasonable reimbursement to cover the cost of accommodation and subsistence. Documentary evidence may be required to satisfy HM Revenue & Customs (HMRC) that the payment should he tax-free.
HMRC has deemed that for the year ending 31 December 2009, £30.75 is reasonable in the UK. For foreign travel, HMRC accepts the Foreign and Commonwealth Office benchmark rates (wwwico.gov.uk).
An operator may make payments of more than the approved amount if the payments are merely to reimburse actual expenditure incurred with supporting evidence, or against the employer's own benchmark rates as agreed with the Revenue.
When a driver sleeps in a sleeper cab the amount paid free of tax should not exceed a reasonable reimbursement of: • Evening meal and breakfast.
• Washing facilities.
• Upkeep of bedding in cab.
Some operators seem to be able to come to local arrangements with their own tax offices, but, currently, HMRC accepts 75% of £30.75, ie £23.06, as reasonable. In respect of midday meals, currently £2 is tax-free. If the amount paid is greater, the employer may opt to use an advisory benchmark scale rate. which is as follows: • Breakfast (before 6am): O.
• One meal (five-hour) rate £5.
• Two meal (10-hour) rate £10.
• Late evening meal rate (after 81)0E15.
If an operator is in doubt as to what arrangements apply it should take advice from a qualified tax adviser or the HMRC. m • Lina Bolton is a chartered accountant with transport lawyers Stone King Sewell LLP • linabolton@skslaw.co.uk