The RHA has heard of at least two member firms who have failed to pick up the change to tax rules to sleeper cab/overnight allowances that we’ve previously reported.
The companies were paying drivers the £26.20 per night allowance free of tax or National Insurance contributions. This was spotted by officials from HMRC who are now demanding payment of the back tax of PAYE and NICS on the allowance paid after April 2017, together with interest and penalty charges. Tax officials argue if no “bespoke agreement” was in place the payment is taxable when it’s paid to the driver.
It appears HMRC’s Policy team is not wanting to undermine their compliance team’s approach and there is every likelihood this matter will now end up before lawyers in a tribunal hearing.
So the RHA is reminding operators about the tax rules on this important issue: You must have an approval notice from HMRC to pay either the Industry Bespoke Allowance, known as the lorry driver’s overnight subsistence allowance, or an individual “bespoke agreement”.
Unless you have a ‘bespoke agreement’ in place with HMRC you should be payrolling the £26.20 and operating income tax and National Insurance on this amount.
You can get full details on this – plus official HMRC guidance on the RHA website here.