EIM02730 - Employment income: incidental overnight expenses: the permitted amount
Section 241(3) ITEPA 2003
»Ê¹ÚÌåÓýapp maximum amounts of incidental overnight expenses that an employer may pay tax free are
- £5 per night for overnight stays in the UK
- £10 per night for overnight stays outside the UK.
If a payment is made that exceeds these limits, the whole of the payment becomes taxable and not just the excess, see example EIM02760. »Ê¹ÚÌåÓýapp limit is applied to the whole of the period that the employee spends away from home and not to each night separately, see example EIM02770.
Where the employer has a policy that requires the employee to pay back any amount received that exceeds the limit, and repayment is made within a reasonable time, the payment to the employee should be treated as not exceeding the tax free limit.