What is the tax-free overnight subsistence allowance available to employed lorry drivers?

This is an overview guide to the tax-free overnight subsistence allowance that may be available to employed lorry drivers.

Overview

The current rate is £34.90 per night.

1. This allowance is payable by employers when drivers are required to stay overnight away from their home and any permanent workplace.
2. The overnight rate includes the cost of meals. Employers should not additionally pay or reimburse the cost of meals on an ‘actuals’ basis or using the benchmark rates.
3. For drivers with a sleeper cab, 75% of the allowance (£26.20) may be paid. Employers must obtain an HMRC approval notice to pay this rate.
4. The allowance is governed by sections 337 and 338 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003). A driver may claim a deduction under these provisions if employer payments are fully taxed through PAYE, do not fully cover expenses, or are not reimbursed.
5. This allowance is not available to self-employed individuals.

Employers may also negotiate their own scale rate with HMRC.

If the employer knows the driver is using their sleeper cab, the tax-free reimbursement should reasonably reflect the cost of:

1. Evening meal and breakfast.
2. Washing facilities.
3. Maintenance of bedding within the cab.

If the employer chooses to pay for the driver's lunch, this amount will not be taxable provided:

2. The payment does not exceed £2.00 per day.
3. The driver is required to take lunch away from home or their permanent workplace.
4. A similar provision is available for bus and coach drivers.