What Travel Expenses will the taxman allow?

Passport with diary open on expenses page

Apart from Business Mileage, what can you claim and what counts as a business trip?

Assuming your employer or supplier or customer aren’t reimbursing your costs….

If you’ve got to make journeys for business purposes you can deduct your travelling expenses from your taxable income – so you’ll pay less tax.

In addition, there is no restriction on the standard of travel and accommodation, provided the main purpose of the trip is that of business, you can travel first class and stay at the best hotels.

But what if the trip is partly business and partly pleasure, in this case you will need to apportion the costs and only claim for the business element.

What are business journeys (HMRC definition)

You can only get tax relief on the cost of business journeys. These are when, as part of your job:

  • you have to travel from one workplace to another – this includes travelling between your main ‘permanent workplace’ and a temporary workplace
  • you’ve got to travel to or from a certain workplace because your job requires you to

But business journeys don’t include:

  • ordinary commuting – when you travel between your home (or anywhere that is not a workplace) and a place which counts as a permanent workplace
  • private journeys – which have nothing to do with your job

If you’re not sure if a place you travel to counts as a permanent workplace telephone HM Revenue & Customs for advice.

Travel expenses include the actual costs of travel and also the subsistence expenditure and other associated costs that are incurred as part of the cost of making the journey.

The cost of business travel includes

  • the cost of any necessary subsistence costs incurred in the course of the journey
  • the cost of meals necessarily purchased whilst an employee is at a temporary workplace.

If an overnight stay is needed then the cost of the accommodation and any necessary meals is part of the cost of business travel. Even where an employee stays away for some time and the travel expenses are deductible, the cost of meals and accommodation is part of the overall cost of the business travel.

Travel expenses that qualify for relief

You can get tax relief on the necessary costs of business travel like:

  • public transport fares
  • hotel accommodation
  • meals
  • tolls
  • congestion charges
  • parking fees
  • business phone calls, fax or photocopying costs

But you can’t get tax relief for things that aren’t directly related to the business journey.

So far so good, but what about…..

Alcohol – claiming for a few drinks with your meal will be fine but other than with meals they would generally be considered a personal expense

Your Family – if you take your wife, husband or partner on a business trip their costs will be taxable unless they are on the trip for a business reason

Newspapers, Laundry and Phone Calls Home – HMRC allow claims for incidental overnight expenses up to £5 per night in the UK and £10 per night outside the UK

Learning the Lingo – no you can’t claim for language lessons

Staying with Friends – until 2009 HMRC were happy to agree a scale rate of £25 per night but now its based on actual costs

Basically, before you claim, stop and think, can you justify the expense as being a business expense for business purposes.