The development follows a long-running dispute between HMRC and the RHA, whose members had complained that rules around the production of receipts by drivers detailing the exact costs of their expenditure were confusing, unfair and costing them money.
HMRC has now climbed down from this requirement, the RHA reports – meaning that other methods of recording expenses for overnight allowances, such as taking a digital photograph of a meal on a smartphone, will now be deemed acceptable by the authorities.
Under the new regime, drivers will need to keep evidence of their expenses until the end of a review period, during which – if the driver is selected for review – it must be passed to the operator for verification.
This evidence can then either be stored by the operator, or a spreadsheet can be prepared detailing the drivers selected for review, what the operator saw as evidence, and the amount of the claim.
The RHA has produced a new factsheet and question-and-answer document to help hauliers understand the rules.
“In a couple of key areas relating to the retaining and checking of receipts HMRC have now accepted that a simpler, more streamlined approach is acceptable,” said the association.
“The guidance is much clearer about how operators can comply with tax inspector checking requirements so the potential for error is less likely.”
RHA chief executive Richard Burnett said the climbdown represented a “significant victory” against an “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,” he remarked.
“Cutting red tape for busy hauliers battling to keep the wheels of the UK economy going at a tough time is to be welcomed.”
Andrew Brookes, head of employer solutions at accountancy firm Menzies LLP, said the industry would be “very pleased” with the concessions that the RHA had secured, saying it would make the management of overnight allowances “far easier for both drivers and fleet operators”.
“Fleet operators have been concerned about the increased administration ever since the abolition of dispensations in April 2016,” he said.
“From that date, a bespoke agreement has been required if hauliers or logistics companies wanted to reimburse more than the standard amounts, or want to adopt the industry rates negotiated by the RHA. Without this, such payments are taxable.
“HMRC has been concerned that some companies might have been abusing the system in order to provide tax-free payments when they are not due and are understandably keen to ensure that this is stamped out. Consequently, they were seeking to impose onerous procedures on firms to prevent abuse.”
He added: “We would recommend drivers are instructed to take a photo of a receipt rather than simply the food they have bought, to avoid the risk of an HMRC officer saying there is no evidence to show that the meal was purchased by the driver and therefore the exemption does not apply.
“From haulage firms’ perspective, they will simply need an acceptable system of random review in place and then a record of the expenses paid, rather than retaining receipts for every single claim.
“While the concessions will be welcomed, it is important to note that haulage firms will still need to apply to HMRC for the right to use the bespoke rates, but we understand a simplified application process has been agreed by the RHA.”
Readers can view the RHA factsheet and Q&A by clicking here.