Overnight subsistence allowances for lorry drivers

20 April 2017

Changes to overnight subsistence allowances paid to lorry drivers mean an approval notice now has to be applied for to continue paying the Industry Scale Rate.

From 6 April 2017 where the employer is satisfied that the employee necessarily incurred expenses as a result of a night spent away from home and his or her permanent workplace (if any), HMRC accepts that a payment of 75% of the allowable figure (currently £34.90 per night) does no more than reimburse the expense incurred when the driver uses their sleeper cab overnight.

Employers can apply to HMRC for an approval notice to use this rate, confirming that they have a procedure in place to check that:

  • the employees were away from their normal place of work or home in the performance of their duties; and
  • actually incurred and paid subsistence costs when away from their normal place of work or home. 

For details of the evidence that can be considered in support of a driver’s expenses see EIM66120.

Payments in excess of this amount may only be paid tax-free where the employer has a bespoke rate agreed with HMRC on an approval notice. See EIM66115.


The mere fact that a lorry has a sleeper cab does not prevent the employer paying an amount tax free up to the limit (£34.90) provided that the employer is satisfied that the driver did incur expenses on overnight accommodation (for example by staying in a hotel) and meals.

Where the employer knows that the driver uses their sleeper cab, the amount paid free of tax should not exceed a reasonable reimbursement of:

  • evening meal and breakfast
  • washing facilities
  • upkeep of bedding in the cab.


Employers paying an overnight rate for drivers who spend nights away from home should remember that an employee can only be reimbursed for the cost of a meal once. As the cost of meals is included in the overnight rate, employers should not also pay or reimburse the cost of these meals on either an ‘actuals’ basis or using the benchmark rates.

Expenses not paid or reimbursed using the benchmark scale rates or covered by an approval notice should be subjected to tax and NICs as earnings from the employment.

Employers wishing to pay or reimburse employees at a rate that has been agreed with HMRC at an industry-wide level, such as the agreed stable lads subsistence rates (See EIM68505), can apply to HMRC for an approval notice. Their application should make it clear that they intend to pay at an industry scale rate published by HMRC. An approval notice issued by HMRC for use of an ‘industry scale rate’ will have the same effect as an approval notice for a bespoke rate and will cease to have effect from a date no later than the end of a period of 5 years beginning with the date on which the approval takes effect.


Full details can be found in HMRC’s employment income manual EIM66130.