The tax treatment of employees’ and directors’ travelling and subsistence expenses was modernised and simplified from 6 April 1998.
Employers can use HMRC benchmark rates to make certain day subsistence payments free of tax and NICs to employees who incur allowable business travel expenses (see www.hmrc.gov.uk/employers/wwsr-bench.pdf). Employers do not have to use the rates. They can reimburse their employees' actual expenditure or apply to HMRC to agree a scale rate appropriate for their business needs in a dispensation.
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