RHA overturns threat to driver ‘night-out’ tax-free allowances

Overnighting drivers using sleeper cabs still do not have to submit receipts for expenditure to claim a flat ‘night-out’ allowance if this has been agreed with their employer, the Road Haulage Association (RHA) has said – following apparent mixed messages from HM Revenue & Customs (HMRC) regarding the current position.

Historically, the RHA has negotiated a maximum night-out allowance with the tax authorities. This has allowed employers to make a tax-free payment to their drivers in compensation for spending the night in the cab, and has helped reimburse drivers for expenditure on bedding and consumables.

The agreement simply requires the employer to be satisfied that the driver is spending the night away from the vehicle’s normal base and that he is therefore sleeping in the cab.

But advice available in HMRC’s online internal manual as Transport Operator went to press suggested that “documentary evidence”, such as log sheets, expenses claims or receipts, would be required to secure the tax-free allowance –  and according to the RHA, some HMRC inspectors have been demanding that employers get proof of purchases from drivers. The association says this is “quite wrong”.

Its lobbying has resulted in HMRC confirming that, the RHA says, “there is no change to the system. Drivers have to be genuinely away in their cabs overnight – in a genuine subsistence position – but nothing further is required.”

RHA director of policy Jack Semple added: “We have confirmation of that from HMRC, but HMRC inspectors have, in some cases, been imposing new demands on hauliers. And the website has been incorrect. It should have been put right immediately, and we have made that point to HMRC.”

According to figures in its manual, HMRC currently allows lorry drivers to be paid £34.90 per night as a tax-free subsistence allowance when spending the night away from home. Where the lorry has a sleeper cab which the driver uses overnight, this figure drops by 25 per cent to just over £26.

Semple added: “The over-night subsistence payment is proper recognition of the realities of the road haulage industry – a sector that is vital to the UK economy – and HMRC should not be seeking to add to that burden of red tape in the way that it functions. More to the point, it has agreed not to do so – but appears to have failed to communicate that internally.

“I fear that many hauliers, from the smallest to the very large, may have been told there are changes when there are none; that a more complicated system is being imposed, when that is not the case.”