I will be staying away from home on my assignment. Is it true that I can claim a flat rate amount whether I spend it or not?
Answer: Not quite!! Employees staying away from home overnight on business often incur additional expenses of a personal nature. Examples include newspapers, laundry and home telephone calls. Although the expenditure may arise as a consequence of working away from home, it is not incurred necessarily or in the performance of the employee’s duties. Under the expenses rules that apply to travel costs this type of expenditure would not be allowable as a deduction but a special exemption provides that you may claim up to a tax-free limit.
The maximum amounts of incidental overnight expenses that you may claim are:
• £5 per night for overnight stays anywhere within the UK, and
• £10 per night for overnight stays outside the UK.
In calculating the total amount of expenditure any Value Added Tax (VAT) paid must be included and you must have receipts to support the claim.
HMRC references to “up to” , “maximum” and “receipts” are clear indicators that this is not a round sum allowance and it must be in respect of actual expenditure incurred for which you hold a receipt.