Quick question – anyone know current HMRC guidance on paying an overnight allowance for someone staying with friends instead of incurring a hotel cost? I used to do this in the past and my current company is quite keen to do it as it obviously saves them cash (they’re suggesting £25/night allowance rather than £150ish on a hotel and food etc). However, it’s been suggested there may be “benefit in kind” issues and a £25/day allowance would need to be declared on P111d and would therefore be taxable.

Had a hunt on HMRC website and can’t find the answer…

According to my accounting company (IT contracting) it does have to be declared, it is a taxable benefit same as a hotel cost.

http://www.hmrc.gov.uk/manuals/eimanual/EIM30073.htm

Whatever that means.

My previous public sector employer used to pay £25 per night inclusive of all meals. We didn’t have to declare that on any tax return. Rules appear to be different now. Craigxxl is the man for the definitive answer.

littlemisspanda – Member
According to my accounting company (IT contracting) it does have to be declared, it is a taxable benefit same as a hotel cost.
POSTED 4 MINUTES AGO # REPORT-POST

Hotel for business use a taxable benefit?

Get your friends to give you a receipt for £40 per night and everyones a winner?

Overnights/allowances when working away aren’t a benefit in kind.
As you are away you can’t really make a packed lunch, etc so it’s necessary.
Check though as it depends on how it’s done.

If they are keen to do it, let them get/pay-for the advice.

We are allowed a £25 gift to the people we stay with – either keep a receipt for something you bough or they sign a simple receipt for cash if you pay. I make no money, it is a gift for the host.
If it is an allowance you claim and not spend it, it is taxable.

Our company has a scheme where if you stay with a colleague they can expense the company something like £30/night. As you can keep up to £4k tax free under rent-a-room scheme, there’s no need for the recipient to declare it. I’ve put a few of our overseas colleagues up over the years under this scheme, bit more relaxed than a hotel.

So kinda muddy area then – cheers, I’ll make sure we get the correct advice if we do go down this route 🙂