The tax treatment of employees’ and directors’ travelling and subsistence expenses was modernised and simplified from 6 April 1998.

Benchmark rates

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 ¶3-535). 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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