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Posted 14 July 2017
by Josh O’Neill

HMRC change to monitoring employee expenses

From 6 April 2017, two new requirements have been imposed on hauliers that pay tax-free overnight allowances to their drivers. The allowance is currently £26.20 for a driver with a sleeper cab.

  1. Hauliers are required to obtain agreement from HMRC to make this payment [income] tax and national insurance free.
  2. At least each 6 months, employers must undertake a random check of 10% of all employees’ expense claims over a one-month period.

If the employer does not receive HMRC agreement or evidence that it has carried out the checks, the HMRC may decide the allowance will not be free of tax. Depending on the terms of the employment contract, this could lead to possible tax liability for the employer.

The Road Haulage Association (RHA) have been critical of the changes, which may see costs for some operators rise by up to £100,000. In particular, there is concern that it will create an additional burden on business and provide a further obstacle to resolving the labour crisis currently facing the transport industry which is likely to worsen post Brexit.

Employers are encouraged review their employment contracts and policies in light of the change of law. For more information on how the changes will affect your business please call a member of the Tozers transport team on 01392 207020.


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About the author

Josh O’Neill

Trainee Solicitor

Trainee Solicitor in the litigation department