Expenses and benefits: incidental overnight expenses
What to report and pay
If any of the overnight expenses you cover aren’t exempt, you may have to report the costs to HM Revenue and Customs (HMRC), and deduct and pay tax and National Insurance on them.
For expenses above the £5 or £10 threshold, you must:
- report them on form P11D
- deduct and pay PAYE tax and Class 1 National Insurance through your payroll - use the full amount that you pay to your employee, not just the amount above the £5 or £10 threshold
Salary sacrifice arrangements
If the costs are less than the amount of salary given up, report the salary amount instead.
These rules don’t apply to arrangements made before 6 April 2017 - check when the rules will change.