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Posted Fri, 26 Apr 2024 13:55:26 GMT by Annie-Lee Cox
How should a company account for where an employee (in this case, a Lorry Driver), pays for overnight parking at a truck stop which includes a food voucher? The company operates a benchmark scale rate payment in addition to the incidental overnight expense, as such, the employee receives £30 of tax free amount via payroll (£25 for 15 hours and ongoing at 8pm plus £5 for incidental overnight). The employee uses a truck stop for overnight stay and is charged £33 which they pay out of their pocket (£30 parking and £3 food voucher). Should the employer reimburse the employee in full for the parking costs of £30? How much of this costs as it relates to parking should the employer reimburse to the employee, if any? If the parking costs should be reimbursed to the employee, are there any conditions that should be met for this to be reimbursed? For example, a truck stop charges £29 for parking only but if the employee pays £31, they get a £12 food voucher. So for an additional £2, they get an extra £10 to purchase food. In this scenario, should the employer reimburse the employee £29 for parking expense or £19 (£31 - £12). The reason behind the £19 is that the employee is already receiving £30 for food and subsistence which covers the £12. Also where the receipt received from the employee does not show a breakdown of how much of the payment relates to parking and what relates to food voucher, what amount should be reimbursed to the employee? As this parking costs relates to VAT, can the employer reclaim the VAT incurred on the parking costs, provided the employee provides a VAT receipt? In the above example of the £31 paid for parking plus food voucher, if the employer reimburses £19, is VAT reclaimable only on the £19 reimbursed or the £29 being the parking costs? Where it is unclear from the VAT receipt how much of the payment relates to parking and how much relates to food voucher, if any, where the full amount is considered to be parking, can the VAT amount be reclaimed in full? Is it advisable that employers carry out an investigation with the truck stop involved to assess how much relates to parking and/or food voucher, if any? Before reimbursing the employee or reclaiming VAT on parking?
Posted Thu, 02 May 2024 08:48:54 GMT by HMRC Admin 25
Hi Annie-Lee Cox,
You can either refund actual costs or use a benchmark rate, you can't use both methods on a single transaction type.
So as you are already using a benchmark rate for subsistence, yes the food element of these vouchers woud already be covered by that and would therefore not also be reimbursed as actual costs.
Exactly how you determine that is not something we can advise on.
You may also wish to consider depending on your circumstances the industry scale rate for lorry drivers overnight subsistence.
Please see EIM66205 for further information:
EIM66205 - Tax treatment of lorry drivers: employer guidance: scale rate payments to drivers
For VAT related questions you would need to contact VAT helpline.
Please see here for contact details:
VAT: general enquiries
Thank you. 

Posted Thu, 02 May 2024 10:20:09 GMT by Annie-Lee Cox
Thank you for your reply. The manual speaks of meal and subsistence as it relates to lorry drivers and overnight stays, which I assume does not include parking costs. The drivers are using the company lorries to deliver or collect vehicles. Where they have incurred parking costs for overnight parking, should this not be reimbursed to the lorry drivers? Is this not, separate from the scale rate payments to drivers and should be dealt with separately? Please let me know. Thank you
Posted Tue, 07 May 2024 11:07:49 GMT by HMRC Admin 8
You can pay back the actual costs from a qualifying business journey without having to report it as a benefits.
Thank you.

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