HMRC Travel Expenses – Guidelines To Claim Tax in the UK

Whether you’re flying to a convention or driving to meet a client, there’s a chance you’ll need to spend on travel as a part of your business. In many cases, this business travel qualifies as an eligible expense that you can deduct from your profits when you file your income taxes. By familiarising yourself with the HMRC travel expenses guidelines for employers, employees, and self-employed people, you can make the most of this expense deduction and save your taxes.

Key Takeaways

• Business travel expenses are costs you pay when you travel for work.
• If your travel expenses are exclusively for business, you may be able to claim them as an HMRC expense deduction.
• Eligible expenses include transportation, accommodation, and meals while travelling for business.
• Employers don’t need to pay tax on reimbursements for employee travel expenses for work.
• Employees usually submit a travel expense claim to their employer, then claim any remaining amount from the HMRC.
• Self-employed people can claim travel expenses against their profits on their income taxes.
• Travel to a temporary workplace is eligible for travel expenses, but commuting to a permanent workplace is not.
• In lieu of claiming travel expenses reimbursement with receipts, the HMRC offers a per diem option.

Table of Contents

• What are Travel Expenses?
• Travel Expenses Basic Rules
• Travel Expenses For Employers
• Travel Expenses For Employees
• Travel Expenses For The Self-Employed
• What are Permanent and Temporary Workplaces?
• What are Per Diem rates?
• What is the 24-Month Rule for HMRC?
• How to Claim Travel Expenses from HMRC?
• Start Managing Your Expenses with FreshBooks
• Frequently Asked Questions

What are Travel Expenses?

Business travel expenses are costs you’ve incurred while travelling for work. This includes everything from accommodation to meals, so long as the expenses are exclusively related to your business. It’s important to note that there’s a difference between business travel expenses and personal travel expenses—for example, if you add a few days of personal holiday to the end of your work trip, expenses incurred during the personal time won’t be eligible for deduction.

Travel Expenses Basic Rules

The primary rule for HMRC travel expense deductions is that any costs you claim must be necessary and exclusively for your business. This means that you can’t really claim tax relief for things that are a mix of business and personal or expenses that aren’t necessary for your business. However, so long as your expenses are for the purpose of your work trip, they’ll likely be eligible. Some common eligible HMRC expenses are:

• Hotels and accommodation
• Airfare and other transport ticket costs
• Vehicle mileage (for personal vehicles)
• Meals
• Parking costs

Private vs Business Travel

Business travel is travel that’s exclusively for the purpose of conducting business and is necessary for the success of your business. For example, if you must travel to meet a client or to view a production site for your business, your travel, accommodations, and meals on this trip would all qualify as work expenses. Private travel is anything outside of that—this could be trips taken for personal interest or adding a few days onto a business trip. Private travel and ordinary commuting aren’t eligible for HMRC deductions.

Travel Expenses For Employers

As an employer, there may be times when you require your employees to travel for business. 

Understanding the reimbursement of travel expenses helps you claim the right deductions from the HMRC. Commonly, employees will pay their travel expenses directly and then submit an expense claim to you so the business can reimburse them. As the employer, you don’t need to declare or pay taxes on the amount you reimburse employees. Paying for an employee’s travel expenses qualifies as an exemption.

Deductible	Non-Deductible
Travel other than commuting to and from the permanent workplace	Normal commute to and from the permanent workplace
Parking costs and public transportation	Parking fines, speeding tickets, and other penalties
Overnight accommodation on work journeys	Travel costs are not exclusively for work, e.g. top-ups of travel cards are also used for non-work
Dinner and breakfast when staying overnight
Food and drink on work journeys outside normal commute—actual or day rates

Travel Expenses For Employees

If you’re paying for business travel expenses, you’ll often submit an expense claim to your employer so they can reimburse you for your travel costs. Ideally, your employer will reimburse you for the full amount of your expense reports, but in cases where this doesn’t happen, you can claim the remaining amount as tax relief when you file your income taxes. Remember to keep any receipts or expenses so that you can submit them to your employer or to the HMRC as needed.

Deductible	Non-Deductible
Travel other than commuting to and from the permanent workplace	Normal commute to and from the permanent workplace
Parking costs and public transportation	Parking fines, speeding tickets, and other penalties
Overnight accommodation on work journeys	Travel costs are not exclusively for work, e.g. top-ups of travel cards are also used for non-work
Dinner and breakfast when staying overnight
Food and drink on work journeys outside normal commute—actual or day rates

Travel Expenses For The Self-Employed

If you’re a sole trader, self-employed, or a contractor, you can claim tax relief from your HMRC travel expenses rates as a deduction from your taxable income. The types of things you can claim are the same as for employers and employees—public transport, accommodations, meals, etc. When you file your annual income taxes, you can hold your travel expenses against your profits to reduce your overall tax liability.

Deductible	Non-Deductible
Travel other than commuting to and from the permanent workplace	Normal commute to and from the permanent workplace
Parking costs and public transportation	Parking fines, speeding tickets, and other penalties
Overnight accommodation on work journeys	Travel costs are not exclusively for work, e.g. top-ups of travel cards are also used for non-work
Dinner and breakfast when staying overnight
Food and drink on work journeys outside normal commute—actual or day rates

Looking for ways to simplify your tax filing? Discover how FreshBooks takes the pain out of tax preparation for helpful tips on navigating tax season.

What are Permanent and Temporary Workplaces?

Knowing the difference between permanent and temporary workplaces is important in ensuring you claim the appropriate travel deductions. For HMRC purposes, a permanent workplace is somewhere an employee regularly goes to do work. This could be an office, a place of business, a home office, or a mixture of these. A temporary workplace is somewhere an employee goes for work duties of a short-term nature. This might be travelling to meet a client or to an event or showcase related to their business. Commuting to a permanent workplace doesn’t qualify as business travel, whereas going to a temporary workplace is eligible. 

What are Per Diem rates?

Per diem rates are a collection of HMRC-set rates for travel expenses. These are used as an alternative to reimbursement for actual costs. Rather than saving all your receipts, you simply have to prove that you engaged in business travel, and you can receive reimbursement at a set rate for your business travel costs. The HMRC has rates for travel inside the UK, as well as some for outside the UK and for specific global cities. This can be a quick and easy system for claiming business travel costs without tracking exact expense amounts. 

What is the 24-Month Rule for HMRC?

The 24-Month Rule is an HMRC rule that dictates that a temporary workplace only qualifies as a temporary workplace if an employee works there for 24 months or less. If this rule is met, travel expenses for travel to the temporary workplace can be claimed. However, if work at this temporary workplace lasts for more than 24 months, it’s considered to be a permanent workplace and is no longer eligible for business travel expenses deductions.

How to Claim Travel Expenses from HMRC?

In order to claim travel expenses from the HMRC, you need to include them as a business expense claim when you file your annual income taxes. If you’re an employee, you’ll typically submit an expense claim to your employer first and then claim any remaining amount from the HMRC in the event that your employer doesn’t fully reimburse you. You can then choose to file a claim with your receipts for the exact amount or claim per diem rates. FreshBooks accounting software helps you track your expenses so you can accurately claim your various business expenses for travel when you file.

Start Managing Your Expenses with FreshBooks

Understanding HMRC regulations for claiming travel expenses can help you make the most of this tax exemption and save money on your income taxes. Whether you choose to submit your receipts or claim the travel expense per diem, keeping track of your travel expenses is important for accurate filing. FreshBooks expense tracking software helps you track everything from transportation and hotel accommodation to mileage on business trips. It’s also MTD-compatible, so you can quickly and easily organise your claims and file your taxes online. Try FreshBooks free to streamline your filing for employers, employees, and self-employed filers.

FAQs About HMRC Travel Expenses

Looking for more information about HMRC travel expenses? Explore answers to frequently asked questions about HMRC mileage rates, proof of business travel, and more.

How much can I claim for travel expenses?

There is no specific maximum for your travel expenses so long as you have proof of business travel. There are set mileage rates—45p on the first 10,000 business miles and 25p on anything beyond that for those using a personal car for business travel. These rates apply to cars and vans; motorcycles and bikes are claimed at a different rate.

What is the HMRC mileage rate for 2023-24?

The HMRC mileage rate for 2023-24 is 45p on the first 10,000 business miles and 25p on anything over 10,000 in the tax year. FreshBooks accounting software offers a mileage tracker to help you keep track of miles logged for business travel. 

What are the 45p travel expenses?

The 45p travel expense is the HMRC mileage rate for business travel using a personal vehicle. This applies to the first 10,000 miles of business travel; anything beyond that is 25p. This per diem can be claimed from the HMRC as a business travel expense when you file your taxes.

How much travel can you claim without proof?

While you don’t always need receipts for your exact expenses, you do need to prove that your travel was for business. If you have no proof of business costs at all, then you can’t claim your travel; if you have proof of business travel but not exact receipts, you can claim per diem rates.

More Useful Resources

• HMRC Tax Refund
• How To Contact HMRC About Tax Code
• How Does HMRC Know About Undeclared Income?

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