acd1202:
It says ERF not RAF:
weeto:
It says ERF not RAF:
From an employed drivers point of view nothing has changed. You still get your tax free night out allowance up to £26.00 ish. The only change affects your employer, HMRC just need proof that the tax free night out money has been given to a driver who has actually had a night out !
You don’t need receipts adding up to the value of your night out money, HMRC just need proof e.g. Run/Log sheets, delivery notes, overnight parking receipt, vehicle tracking info (basically anything to show the driver was away). It’s not really any extra work for your employer as they should have all this info on file anyway ! If your employer is telling you that your night out money is now being taxed they are misinterpreting the legislation or just trying to rip you off !
The employer has to apply to HMRC to be able to make these Tax free payments. This is not a new thing as in the past Employers had to apply to be able to pay tax free meal allowances (most drivers are unaware of this as it was dealt with by their Employers accounts dept). Basically it’s a storm in a teacup fed by rumour and false information.Not quite right
To pay the sleeper cab allowance tax free you need to obtain agreement from HMRC in the form of a
bespoke agreement. To get such an agreement, you will are required to:
- get your drivers to retain receipts of the costs they have incurred when they are claiming the
sleeper cab allowance and- undertake a random check of those claims.
HMRC requires employers who are operating a ‘bespoke agreement’ to have a process in place for
checking evidence of expenditure incurred by drivers. The system requires drivers to retain evidence
of costs they incur in the form of receipts and for the employer to have a checking system in place.
That checking process needs to include an examination of a minimum of 10% of claims (ie drivers) in
each expenses period (normally one month) and that the employer will select drivers at random to
ensure that it is not always the same individuals who are selected.
In reviewing expenses it is not a case of ensuring the £26.20 was incurred on any given day because
HMRC accepts that taking one day with the next the £26.20 is a reasonable estimate of the costs a
driver is likely to incur. The demonstrated expense must be broadly in line, however. What qualifies
as broadly in line is not defined.
If a driver fails to provide adequate evidence when he/she is selected for review then you will need
to advise the driver of their failure to provide evidence that they have incurred expense and carry
out a subsequent review to see if they are now complying. For those drivers who subsequently fail to
provide adequate evidence HMRC would expect them to no longer be eligible to receive the
payment free of tax and National Insurance.
RHASo, which bit is “Not quite right” ?
Err, all of it. Proof that you had a night out is no lnger sufficient, as has been explained you need to be able to show that you incurred expenses amounting to your night out allowance, the only acceptable proof to HMRC are receipts. You don’t have to show all your receipts but enough to show that you spend the money on average. In other words if you spend your night out money then HMRC are happy to treat it as a tax free expense reimbursement, but if you try to live for nothing and treat it as wages, they want their share. And what the tax man wants, eventually he tends to get.
I’m not surprised that this has happened. When the MPs expense scandal was going on, there where many talking heads on the TV and radio saying how outrageous it was, that MPs could claim expenses without receipts and nobody else could. At the time I thought, I know another group who can, trouble ahead.
I can see what will happen if you only have to show the odd days receipts. 1 day per week the full £25 will be spent on a nice evening meal etc . Then when HMRC ask for proof that the night out allowance is been used properly these are the receipts that will be handed over.