Personal Incidental Expenses 0an overnight allowance

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Introduction 

Personal Incidental Expenses (HMRC) are an overnight allowance while working away. These are also known as PIEs and you may be able to claim these as part of your overall business expenses.

The PIEs are similar to a Per Diem rate (Latin for per day or daily) or daily allowance. It is a specific amount of money that a business gives an individual. This is typically an employee per day to cover their out-of-pocket expenses when travelling on the employer’s business. Therefore, the PIEs are effectively like a HMRC Per Diem allowance.

When you incur travel expenses as part of your working day, you may work away from home overnight. If you are, you may also incur some incidental overnight expenditures however, what are incidental expenses?

PIEs are an allowance available to business owners and employees when they stay away from home overnight for work reasons. This incidentals allowance could be in respect of a one-off business trip or staying away as part of your general contract work.

Initial thoughts

As a director who runs your own UK company, you may travel to different locations for business reasons. Therefore, you may incur incidental travel expenses if you stay away from home overnight for work-related reasons.

To summarise, you will more than likely incur personal expenses when your work involves an overnight stay away from home. Although personal incidentals are non-business, the PIEs allowance is an overnight expenses allowance and it covers such personal expenses. When you can claim the allowance, it can be part of your overall business expense report, saving your company tax.

Personal Incidental Expenses (UK)

The overnight allowance for PIEs can often be missed. Therefore, please make sure you claim the incidental overnight expenses allowance when you stay away from home for business.

Besides the travel expenses you incur, you can also claim for the PIEs. Therefore, as part of your expenses paid or reimbursed, please ensure you include any PIEs on your expense report. Incidental travel expenses will include sundry-type costs you will incur while working away. We also detail several Personal Incidental Expenses examples below and it is notable that these are small incidental costs, where you may not have a receipt.

As a side note, contractors often miss another expense called Trivial Benefits.

Please read our article which covers tax tips for contractors.

Personal Incidental Expenses examples -what do they cover 

PIEs are an available allowance for your business and they cover items which you would not incur if you were at home. You can claim this overnight allowance working away at a client site. Some Personal Incidental Expenses examples of such items could include:

  • Telephone calls home.
  • Expenses for laundry.
  • Buying newspapers.
  • Coffee at the airport or train station.

Please note that if any of the overnight incidental expenses you cover in your claims are not exempt, you may have to report the costs to HM Revenue and Customs (HMRC). The word `exempt’ on the HMRC website relates to the given limits of £5 and £10. Therefore, we will conclude that HMRC means PIES would need reporting to them if they exceed the given limits. Reporting to HMRC will result in deducting PAYE tax and National Insurance Contributions on the amounts paid.

The available rates 

There are fixed allowances available for HMRC incidental expenses when you make a claim for these.

You do not have to report or pay anything to HMRC in respect of incidental overnight expenses if you claim no more than:

  • £10 per night in respect of incidental personal expenses for travel outside of the UK when you are contracting abroad.

Personal Incidental Expenses -other things to think about 

If any overnight expenses you claim are not exempt, you may have to report the costs to HMRC. As a result, you will need to deduct and pay tax and National Insurance on these.

What you must do

It is important to note, 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 amount you pay your employee, not just the amount above the £5 or £10 threshold.

No receipts required

When you claim for PIEs, you do not need to ask for or keep receipts. As a result, you can claim the fixed rate of £5 or £10 per night. You can claim this for each night you spend away from home for work-related reasons to cover your incidental expenses.

The 24-month rule 

You should also note that you cannot claim for PIEs if you fall foul of the 24-month rule. This relates to being unable to claim for travelling costs once you know that you will be based at a given work site for more than 24 months.

Final thoughts 

Not all contractors are aware of the Personal Incidental Expenses allowance. Therefore, besides claiming for your contractor travel expenses such as accommodation costs, rail fares, mileage, etc., when you stay away, you can also claim for the PIEs. This can make a difference, especially if you are staying away from home overnight regularly during the year. Therefore, if you are not yet claiming for PIEs and can do so, please consider claiming for these in the future.

Link to Contractor Advice UK group on

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Published On: August 1st, 2022 / Categories: Expenses, featured, Most Read Articles /

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