Travel and subsistence general rules and guidance
Updated: Jun 7, 2019
We are often asked advice as to the rules on claiming expenses incurred for travel and meals. This article should provide a general guide as to the rules applied by HMRC.
The main rule that applies is that you can only claim a deduction for expenses that have been incurred wholly, exclusively and necessarily for business purposes
If the company were to pay for any private travel or expenses, whilst the company could then claim tax relief, the individual would likely be taxed on the benefit and it would also be subject to national insurance. For obvious reasons, we try to avoid this situation.
There are two types of business travel to consider.
Travel from one work place to another. This would cover travel from your main work place to another place of work. For example, you travel from your office to a client or supplier’s office.
Travel from home to a temporary workplace and back can be claimed as a business expense. However, travel from home to your normal place of business is not an allowable business expense. Otherwise every employee would be claiming their everyday commute. So HMRC has defined what a temporary workplace is.
A temporary work place is a place you attend for work for a limited duration.
It is worth noting that even if you are attending a temporary work place, if the journey is substantially the same as your normal commute it will not be allowable. For example, if the temporary work place is just across the road from your normal place of work.
HMRC have stated that for a workplace to be temporary it must be for a contract that is expected to last less than 24 months. Or, if the contract is for longer than 24 months, you will be spending less than 40% of your working hours at the temporary workplace.
If you are an employee or director and you use your own car for travel, you can claim for the mileage you cover in your car. HMRC have published Approved Mileage Allowance Payments (AMAP). For help on how these apply please contact us for more information.
You will notice how it is rarely referred to as just ‘travel’. So, what is subsistence?
Any food, drink or accommodation expenses you incur whilst you are travelling on business can also be claimed. Receipts for these should of course be kept to make the claim.
HMRC have also released advisory rates that a business can use to reimburse employees. For these payments to be allowable an actual expense must have been incurred for valid business subsistence.
Breakfast rate – up to £5 This rate only applies to irregular early starts, where an employee leaves home earlier than usual and before 6am.
One meal rate - £5 This rate applies if you are away from your normal place of work for more than 5 hours.
Two meal rate - £10 This rate applies if you are away from your normal place of work for more than 10 hours.
Late evening meal rate - £15 This rate can only be claimed for irregular late finishes, after 8pm, where you have had to buy a meal which you would normal consume at home. This rate can be claimed even if you have claimed the one or two meal rates.
If you have any questions on the above or require any guidance please contact us at your convenience.
The information contained within this document is correct at the time of issue. Advice should be sought from an accounting or tax professional before following any guidance.