Income Tax (Earnings and Pensions) Act 2003 section 33-34

Incidental overnight expenses and benefits [ITEPA 2003 Sch 7 paras 33-34]

Section 33-34 deals with the transitional rules for incidental overnight expenses and benefits, ensuring consistent treatment of exemption limits where a period of absence straddles the introduction of ITEPA 2003 on 6 April 2003, or where non-cash vouchers obtained under the old rules are used after that date.

• Where an employee's period of overnight absence began before 6 April 2003 and ended on or after that date, the exemption limit for incidental overnight expenses must be calculated as though ITEPA 2003 had been in force for the entire period of absence
• The same approach applies where a non-cash voucher was provided under the old ICTA rules but goods, services or money are obtained using it during a period of absence starting on or after 6 April 2003
• For determining whether the authorised maximum has been exceeded in relation to straddling absences, the calculation must aggregate the exemption provisions total (as defined in section 241 of ITEPA 2003) with any amounts already accounted for under the old ICTA provisions
• These transitional rules ensure there is no gap or duplication in the tax treatment of incidental overnight expenses as employees and employers move from the old ICTA regime to the new ITEPA 2003 framework