HMRC News Today: BESA Lodging Allowance Updated to £54.50
News update: 16 October 2026. Checked against HMRC’s updated guidance today.
HMRC has today added updated BESA lodging allowance rates to its Employment Income Manual. The listed amount is £54.50 per night from 5 October 2026. The update matters to employees covered by the relevant working rule agreement and the employers processing their allowances.
What has changed, and when?
HMRC’s EIM71327 table now lists the following lodging or overnight subsistence allowances:
From 5 October 2026: £54.50 per night.
6 October 2025 to 4 October 2026: £52.69 per night.
7 October 2024 to 5 October 2025: £50.86 per night.
The increase against the previous period is £1.81 per qualifying night. For example, five eligible nights at the new rate total £272.50, compared with £263.45 at the previous rate: a difference of £9.05. This is an allowance calculation, not a promise of a tax refund.
Keep the two dates separate: HMRC published the manual update on 16 October, while the table gives 5 October as the start date for the new rate.
Who is covered by the BESA arrangement?
BESA stands for the Building Engineering Services Association. HMRC’s list links its agreement to the heating, ventilating, air conditioning, piping and domestic engineering industry.
Working rule agreements are negotiated by employer and trade union representatives to set pay and conditions for hourly paid operatives. They primarily cover site-based employees who move between different workplaces rather than normally working at an employer’s depot.
£54.50 is not a universal overnight allowance for every UK construction worker. Other construction and engineering groups have separate agreements. CIS registration or simply working on a building site does not, by itself, establish entitlement to the BESA allowance.
When can lodging payments be tax-free?
Under HMRC EIM71307, the usual procedure requires a completed lodging allowance application. It certifies additional lodging costs away from home and responsibility for maintaining dependants at the permanent home address. Some agreements also impose conditions on the method of recruitment.
Employers must retain the completed paperwork. Without a suitable application or another permitted procedure, the allowance cannot automatically be treated as tax-free. HMRC describes additional procedures for employees without dependants, so those cases need separate assessment.
Travel-time pay and fare reimbursement are different
The BESA guidance also distinguishes two travel elements. Daily Travelling Allowance payments relate to travelling time and are fully taxable.
For Reimbursement of Fares under this arrangement, HMRC lists a tax-free public transport fare for travel from centre to site, or a mileage rate of 25p per mile. This is the agreement-specific treatment; do not automatically apply that figure to other employee mileage claims or self-employed business travel.
What should workers and employers check now?
Confirm which working rule agreement actually covers the employment.
Match the lodging dates to the correct rate period.
Keep application forms, overnight-stay and site details, and supporting expense records.
Record lodging allowances, travel-time payments and fare reimbursements separately.
If the previous rate has been used since 5 October, ask payroll to assess whether an adjustment is required under the applicable agreement.
Get help reviewing your allowances
If you work in construction or building engineering services, ZipTax can help review your employment status, allowance records and tax treatment. Bring the applicable agreement and payslips so that your circumstances can be assessed.
Official sources
General information checked on 16 October 2026. Entitlement and tax treatment depend on the applicable agreement and the employee’s circumstances.
