HMRC confused over lorry driver tax allowance, trade group claims

HMRC has failed to update its website for several months over key tax allowance information for lorry drivers, the Road Haulage Association (RHA) has claimed.

The RHA has a historical agreement with HMRC over the payment of a round sum allowance to drivers who use sleeper cabs whilst on a business journey. The agreement requires the employer to be satisfied the driver is away from their normal base and therefore sleeping in their cab in order to receive the allowance.

‘The website has been incorrect’

The RHA notes that although termination of dispensation rules will occur from 6 April, the historical agreement between HMRC and lorry drivers in regards to overnight expenses will continue. According to the trade group, the taxman continues to display on their website that the agreement will not be continuing.

In addition, HMRC has been telling hauliers that they need to get proof of purchases from their drivers if they are going to pay an overnight subsistence allowance up to the rate agreed with the RHA.

But according to the trade group that is quite wrong. There is no change to the system. Drivers have to be genuinely away in their cabs overnight – in a genuine subsistence position – but nothing further is required.

“We have confirmation of that from HMRC,” said Jack Semple, RHA director of policy, “but HMRC inspectors have, in some cases, been imposing new demands on hauliers. And the website has been incorrect. It should have been put right immediately and we have made that point to HMRC.

“The overnight subsistence payment is a proper recognition of the realities of the road haulage industry – a sector that is vital to the UK economy – and HMRC should not be seeking to add to the burden of red tape in the way that it functions. More to the point, it has agreed not to do so – but appears to have failed to communicate that internally.

“I fear that many hauliers, from the smallest to the very large, may have been told there are changes when there are none; that a more complicated system is being imposed, when that is not the case,” continued Semple

‘Total confusion’ for accountants

Alastair Kendrick, tax director at MHA Macintyre Hudson and tax policy adviser to RHA, told Accountancy Age the error by HMRC has created “total confusion within the industry and with accountants”.

“Accountants are approaching their client’s saying these rates no longer apply, but this is incorrect.”

“Over the course of several months we have tried to contact HMRC about getting this error corrected, but they have failed to do this, blaming the problem on a ‘internal problem in updating their website,’” continued Kendrick.

Accountancy Age has contacted HMRC for a response.