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Tax allowances for claiming Travel expenses and Subsistence – According to HMRC

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Do you know which Travel Expenses you can claim?

Whether you are an Owner or Director of a Limited Company, an employee or a Sole Trader, some, or all of the following may be relevant to you.

Travel Allowances from your place of work

If you are an employee and have a fixed work place, you are not able to claim from home to work, however if you are a home based employee that only travels to your employers offices for occasional meetings then this is claimable.

However, if your employer pays you less than the Mileage Allowance Rate – 45p for the first 10,000 miles and 25p on the others, you can claim the difference against your tax!

Temporary Work Place travel allowances

If your work place is going to be for a period of less than 24 months, it may qualify as a temporary work place. If so, then your travel to and from this place is claimable.

Detailed guidance for temporary work place is in the HMRC guidance EIM32080. There are also some exceptions if you are considered to be an agency worker.

Subsistence – allowable expenses

HMRC has set some benchmark scale rates for subsistence; however, in many cases actual costs via keeping receipts may actually be higher. For an employee food can be claimed if they are travelling on business or working unusual hours. Below are two examples.

Example 1

Jamie normally works 9am to 5pm in Abergavenny, however, he has been asked to work longer hours in order to complete an urgent projection schedule. He has occasionally arrived at the office at 5am to get lots of work done whilst it is quiet.

On these days he can claim the £5 breakfast subsistence allowance.

Example 2

Tim has to attend a conference in Cardiff, although his regular place of work is Crickhowell, it will be a long day and he will be there ten hours.

In this instance he can claim the two meal rate of £10 as he is working at least ten hours. However, if he kept receipts for the meals he purchased, he may find he is better off claiming for the actual cost.

For more details of benchmark subsistence rates go to www.hmrc.gov.uk/briefs/income-tax/brief2409.htm

If you are a sole trader you cannot in general claim these, the exception is you are away from home overnight when you may be able to claim a reasonable dinner and breakfast.

Taxable allowances when travelling

Main travel expense costs that may be allowable are:

  • Train fares
  • Hotel accommodation
  • Public transport
  • Food
  • Alcohol, in moderation with a meal

Travelling costs not allowable by HMRC

Examples of other travel expenses which would not be considered as allowable include:

  • Babysitter costs
  • Barber/Hairstylist
  • Flowers
  • General groceries
  • Luggage/Briefcases
  • Personal charges on hotel bills e.g. in room videos
  • Toiletry items

If you are unsure about the treatment of a travel expense item, your accountant should be able to help or contact us on 01873 830510 if you don’t have an accountant or if you would like to know more about how EH Accountancy can help you. Alternatively, send a message through our enquiry form and we’ll get back to you.