Reimbursing overseas expenses

HMRC recently updated its list of scale rate payments that can be used when reimbursing accommodation and subsistence expenses that employees incur when travelling overseas.

Payments within these rates avoid income tax and national insurance contributions and there is no need to include them on an employee’s form P11D.
The list (found at www.hmrc.gov.uk/employers/wwsr-bench.pdf) covers a wide range of regions and countries, as well as larger cities. Rates are generally in local currency, the US dollar or euro, and allow employers to reimburse employees on either an hourly basis or on a per meal basis.

For example, an employee attends a meeting in New York, staying for 18 hours. The employee can either be reimbursed $72.50 (for a stay between 10 and 24 hours), plus the accommodation rate of $204 – assuming the employee stays overnight. Alternatively, reimbursement could be on a per meal basis – for example, breakfast $17, lunch $25.50, dinner $40, drinks $7, plus accommodation.

The rates do not cover en route expenses, such as the taxi to a UK airport, nor the £10 per night allowance payable to cover incidental expenses. Employers also have the option of negotiating their own scale rates or reimbursing employees based on actual, vouched expenses.