Section 240 — Income Tax (Earnings and Pensions) Act 2003: Incidental overnight expenses and benefits

Incidental overnight expenses and benefits 240 1 No liability to income tax arises in respect of a sum if or to the extent that it is paid wholly and exclusively for the purpose of paying or reimbursing expenses which—

a are incidental to the employee’s absence from the place where the employee normally lives, b relate to a continuous period of such absence in relation to which the overnight stay conditions are met (a “qualifying period”),

and c would not be deductible under Part 5 if the employee incurred and paid them and Chapter 2 of this Part (mileage allowances and passenger payments) did not apply.

2 No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge) in respect of a benefit provided for an employee if—

a its provision is incidental to such an absence during a qualifying period, and b no amount would be deductible in respect of it under Part 5.

3 Subsections (1) and (2) are subject to section 241 (incidental overnight expenses and benefits: overall exemption limit).

4 The overnight stay conditions are that—

a the employee is obliged to stay away from the place where the employee normally lives throughout the period, b the period includes at least one overnight stay away from that place, and c each such overnight stay during the period is at a place the expenses of travelling to which meet condition A or B.

5 Condition A is that the expenses are deductible under Part 5 (otherwise than under any of the excepted foreign travel provisions) or would be if the employee incurred and paid them and Chapter 2 of this Part did not apply.

6 Condition B is that the expenses are within section 250 or 255 (exemption of work-related and individual learning account training provision) or would be if the employer paid or reimbursed them.

7 In this section “ excepted foreign travel provisions ” means—

a section 371 (travel costs and expenses where duties performed abroad: visiting spouse’s civil partner's or child’s travel),

b section 374 (non-domiciled employee’s spouse’s civil partner's or child’s travel costs and expenses where duties performed in UK),

and c section 376 (foreign accommodation and subsistence costs and expenses (overseas employments)).