travel to work expenses hmrc

Save up to 500 Hours on Paperwork 🙌 50% Off for 3 Months. BUY NOW & SAVE

50% Off for 3 Months Buy Now & Save

Wow clients with professional invoices that take seconds to create

Quick and easy online, recurring, and invoice-free payment options

Automated, to accurately track time and easily log billable hours

Reports and tools to track money in and out, so you know where you stand

• Online Accountants

Easily log expenses and receipts to ensure your books are always tax-time ready

Tax time and business health reports keep you informed and tax-time ready

Track project status and collaborate with clients and team members

Set clear expectations with clients and organize your plans for each project

Client management made easy, with client info all in one place

FreshBooks integrates with over 100 partners to help you simplify your workflows

Send invoices, track time, manage payments, and more…from anywhere.

• Businesses With Employees
• Businesses With Contractors
• Self-Employed
• Freelancers
• Marketing & Agencies
• Accounting Partner Program
• Collaborative Accounting™
• Accountant Hub
• A Beginner’s Guide to MTD
• Reports Library
• FreshBooks vs Quickbooks
• FreshBooks vs Xero
• Invoice Templates
• Accounting Templates
• Business Name Generator
• Help Center
• Business Loan Calculator
• Markup Calculator
• VAT Calculator

Call Sales: +44 (800) 047 8164

• All Articles
• Productivity
• Project Management
• Making Tax Digital

Resources for Your Growing Business

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

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.

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)
• 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.

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.

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.

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.

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.

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. 

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. 

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.

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.

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?

Levon Kokhlikyan, ACCA

About the author

Levon Kokhlikyan is a Finance Manager and accountant with 18 years of experience in managerial accounting and consolidations. He has a proven track record of success in cost accounting, analyzing financial data, and implementing effective processes. He holds an ACCA accreditation and a bachelor’s degree in social science from Yerevan State University.

RELATED ARTICLES

Save Time Billing and Get Paid 2x Faster With FreshBooks

Want More Helpful Articles About Running a Business?

Get more great content in your Inbox.

By subscribing, you agree to receive communications from FreshBooks and acknowledge and agree to FreshBook’s Privacy Policy . You can unsubscribe at any time by contacting us at [email protected].

👋 Welcome to FreshBooks

To see our product designed specifically for your country, please visit the United States site.

HMRC travel expenses: guidelines for business travel & tax in the UK

Published on January 16, 2024

Corporate travel has developed a love/hate reputation. For employees, it's exciting to get out of the office and change up the routine. For employers, travel is a key driver of growth. Meeting prospects and clients in person is still incredibly effective , even if feels a little old fashioned.

So there's plenty to love.

And yet,  managing travel - and especially travel expenses - is nobody's idea of a good time. Particularly when the rules and regulations from HMRC aren't clear to everyone.

So to help, we've put together this guide to travel expenses for UK businesses . Once you understand what HMRC expects (and therefore what you need to do), managing travel doesn't feel quite so painful.

Disclaimer: This is not legal, accounting, or tax advice -  it's simply a guide. If you need help, check with your accountant or contact HMRC directly .

Now, let's start with the obvious question.

What are travel expenses?

As the name suggests, travel expenses are company expenses incurred while travelling . These include transport costs, meals, and vehicle mileage , among others.

And as with all legitimate business expenses, companies may be able to claim tax relief on these costs. If it meets all of the correct requirements, business travel is normally free from tax .

So both for companies and individual employees, it makes fiscal sense to track and claim tax relief on business trips.

HMRC travel expenses: the basics

HMRC may provide tax relief if costs fall into the following categories :

Public transport costs

Hotel accommodation if you have to stay overnight

Food and drink

Congestion charges and tolls

Parking fees

Business phone calls and printing costs

As long as these occur during business travel, the company should be able to claim relief.

So what counts as business travel?

LeeP Financial shares this handy reference guide for company managers and employees:

Part of what makes all this tricky is the overlap between private and business travel . It’s not always clear exactly what counts as each.

Private vs business travel

The distinction between these two forms of travel is a common cause of confusion. It’s simply not always clear cut whether a trip is entirely for personal or business reasons .

There can easily be portions of a business trip that look like personal travel, and vice versa.

According to HMRC, only two types of travel qualify as “business” trips:

Journeys employees make in the performance of their duties (where travel is part of their duties)

Journeys to or from a place they have to attend in the performance of their duties (travel to a place where attendance is in the performance of the duties). This usually means visiting a temporary workplace or site outside of their regular commute.

So if travelling  is  your job, or if you have to visit a specific location in order to do your job, this is business travel.

Crucially, “ordinary commuting” is explicitly not counted as business travel.

Travel expenses for employers

Employers are required to report all travel expenses paid to employees during the year . There are some exceptions to this rule, especially where you’re paying HMRC’s advisory rates, or where you’ve applied for a specific exemption .

A few things to keep in mind :

Some expenses like fuel and meals have fixed rates. If you reimburse employees at higher rates, these become earnings (like salary), and are subject to PAYE and National Insurance.

If you provide extras like transport to employees for private travel , this becomes a benefit and is subject to National Insurance as well.

To be deductible, expenses need to be “wholly and exclusively incurred” for the purposes of running the business or generating more business.

But this doesn’t mean every aspect of a trip needs to be related to business. Bleisure trips are permissible, but only the business aspects of that trip can be deducted .

This should be common sense for most businesses. And as long as good records are kept and there’s a smooth process in place, you shouldn’t have much trouble managing travel .

Travel guidelines for employees

If you travel for work, incur expenses as a result, and these expenses are not reimbursed by your company, you may be able to claim tax back from the government .

To claim tax back for any kind of work expense (including travel), a few conditions must be met:

You personally pay for a necessary work cost

This cost is only necessary for work

Your employer doesn’t pay you back

Your employer doesn’t offer you a suitable alternative

And of course, you also have to pay tax, since this is a tax break.

Claiming travel expenses from home to work

We’ve seen that travel expenses can be claimed if you’re travelling to a place of work. But equally, you can’t claim if your travel counts as commuting. So what’s the core difference?

Permanent vs temporary worplaces

Commuting is the regular travel you make to a permanent workplace . Thus, if you want to claim tax back for work travel, these trips need to be to or from a temporary workplace.

In most cases, that’s going to be pretty simple. If you’re out on a sales call, going to a conference, or visiting another branch of the company, you’re not going to your permanent workplace.

Another little note : if your travel to a temporary workplace is not really any different from your regular commute (in time, distance, or costs), you can’t claim relief for this either. So if you're heading to a client just down the road, this is probably not going to count.

For more details, read the section on "the 24-month rule"   below .

Common causes of confusion

Let’s look now at a few of the most common - and often most confusing - areas for mistakes.

Meals and subsistence rates

Not every single pound, dollar, or euro spent while travelling is going to be reimbursed. That would leave the door open to abuse - Michelin-starred meals and exorbitant bar tabs claimed as “business costs.”

To set clear rules and expectations, HMRC has provided a list of meal allowance rates for different cities and countries . These work like a per diem , standardised for all UK businesses. And they also include the cost of accommodation.

When reimbursing employees for meals, companies have a few options:

Use the set amounts allowed by HMRC

Negotiate another rate with HMRC, if the rates provided don’t meet the company’s needs

Reimburse employees in full, no matter the cost

Note : If your business opts for the third choice, the amount reimbursed will only be tax-free up to amount allowed by HMRC . So you can reimburse at a higher rate if you choose, but you’ll have to pay tax on the difference.

Read our full article on meal allowance rates here.

Alongside meals, HMRC has also standardised the amount companies can reimburse employees for fuel tax-free . This reflects the fact that every car has a different expectation of efficiency, and that fuel prices fluctuate.

Instead of trying to deal with this on a case-by-case basis, HMRC has assigned advisory fuel rates for company travel. These apply in two cases:

When reimbursing employees for work travel done in company cars

When employees need to repay the company for private travel in a work car

In either instance, advisory fuel rates tell companies and employees exactly how much they should expect to pay or receive per mile.

Read our full explanation of advisory fuel rates here.

The 24-month rule

We already wrote a detailed explanation of HMRC’s 24-month rule . It’s a relatively simple test to help you figure out whether a workplace is temporary or permanent . If it’s permanent - as a result of meeting the 24-month rule - employees and companies cannot claim tax relief for travel expenses.

Two key conditions have to be met for the 24-month rule to apply:

The employee must have spent or be likely to spend more than 40% of their working time at a workplace, AND;

They must attend it or be likely to attend it over a period lasting more than 24 months.

So in short, if you spend more than 40% of your time in a single workplace over a 24-month period - that’s a permanent workplace .

There are always complications to these rules, so it’s worth reading that article linked above.

Employed, self-employed, both, or neither?

Naturally, there’s no one-size-fits-all rule for employee travel. Your tax rights and obligations depend on your employment status, among other things.

And - especially in the modern careers landscape - there are whole range of different circumstances that can complicate matter. These affect:

Agency staff billing out time to clients

Employees working through umbrella companies

Contractors working through a limited company for a larger company

“Personal Services Companies” (hairdressers, care workers, and labourers, among others) fall under the IR35 legislation and may have other obligations.

This isn’t the time or place to go into all of these circumstances in detail. This post from the Low Incomes Tax Reform Group does a great job of highlighting the differences.

But to clarify: in this post, we’re mainly speaking to companies and their full-time employees .

Best practices to manage travel expenses

As a bonus, here are a couple tips and best practices on handling travel expenses from around the web.

Contractor Calculator - Keep clear records

Contractor Calculator writes for contractors - obviously. But this advice is valuable whether you’re a sole practitioner or run a company of 10,000:

“Both limited company and umbrella company contractors must retain copies of receipts and tickets , and detailed mileage logs, so that they can prove the journey actually took place if investigated by HMRC.”

And of course, you’ll want those receipts if you have come up against a full on audit.

Spendesk - Automate as much as possible

Aside from misunderstood rules, the biggest issues with travel expenses normally relate to admin. Filing and processing every single expense claim by hand is a huge productivity killer.

When it comes to business travel , the more you can automate your expenses, the better.

This means looking for a good travel and spend management tool , like Spendesk. These let you automate processes, and also build in your company travel policy to keep everyone in line.

Work travel shouldn’t be a bore

For many employees, travelling for work is a great privilege. The chance to visit new cities, meet clients, and have new experiences is too good to pass up. They’re the lucky ones.

Too often, business travel gets bogged down in minutiae . The little things - expense reports and transport issues - can overshadow what should be a break from the norm. Which is a shame.

But with good planning, and better technology, corporate travel goes back to being a benefit. So find yourself a good travel management tool , get a smarter way to track expenses and store receipts, and stop sweating all of those little issues.

You can start with this clever travel planning workbook:

For more information about HMRC's rules and guidelines, take a look at these other recent articles:

HMRC VAT returns: an introduction for UK businesses

UK per diem: How HMRC meal allowance rates work

HMRC mileage allowance: How to manage employee car travel

Expense receipts: What is a valid proof of purchase?

e-Receipts: How to store digital receipts for your business expenses

How HMRC advisory fuel rates work for UK businesses

HMRC Employment Allowance: the rules & how to claim

How HMRC research & development (R&D) tax credits work

More reads on Product Updates

Universal Social Charge (USC): a guide for employers

HR integrations: How to connect spend management & payroll tools

8 keys to create an effective annual plan for 2024

Get started with spendesk.

Close the books 4x faster , collect over 95% of receipts on time , and get 100% visibility over company spending.

• English (CA)
• Deutsch (DE)
• Deutsch (CH)

Managing business travel expenses

Guide to hmrc subsistence allowance & expenses, what is a subsistence allowance, how do hmrc subsistence rates work.

• The cost of food or drink must be incurred after the business trip has started
• The trip must be beyond their usual commute and be done as part of official business.
• The journey must take the employee away from their normal place of work for 5 hours or more.

Is meal allowance taxable?

• a meal or beverage is not purchased
• the meal does not constitute additional expenditure
• the “staying with friends or relatives allowance” is claimed
• meals have been taken at home
• meals are provided during a training course, conference or similar activity
• meals are provided on the train or plane and included in the ticket cost

What are the HMRC domestic subsistence allowance rates?

• £5 for travel of 5 hours or more (£10 supplement if travel is ongoing at 8pm)
• £10 for travel of 10 hours or more (£10 supplement if travel is ongoing at 8pm)
• £25 for travel of 15 hours or more (and ongoing at 8pm)

Overnight accommodation rate UK

Meal allowance rates overseas, how does a business report subsistence allowance spend.

Make business travel simpler. Forever.

• See our platform in action . Trusted by thousands of companies worldwide, TravelPerk makes business travel simpler to manage with more flexibility, full control of spending with easy reporting, and options to offset your carbon footprint.
• Find hundreds of resources on all things business travel, from tips on traveling more sustainably, to advice on setting up a business travel policy, and managing your expenses. Our latest e-books and blog posts have you covered.
• Never miss another update. Stay in touch with us on social for the latest product releases, upcoming events, and articles fresh off the press.
• Business Travel Management
• Offset Carbon Footprint
• Flexible travel
• Travelperk Sustainability Policy
• Corporate Travel Resources
• Corporate Travel Glossary
• For Travel Managers
• For Finance Teams
• For Travelers
• Thoughts from TravelPerk
• Careers Hiring
• User Reviews
• Integrations
• Privacy Center
• Help Center
• Privacy Policy
• Cookies Policy
• Modern Slavery Act | Statement
• Supplier Code of Conduct

Track mileage automatically

Hmrc travel expenses guidelines, in this article, what qualifies as travel expenses, are reimbursements for travel expenses tax-free, what are per diem rates, travel expenses for employees, travel expenses for the self-employed, travel expenses for employers.

If you are a UK resident who travels for work, your business-travel expenses likely qualify for either reimbursement or tax relief.

HMRC travel expenses guidelines are a somewhat complicated matter, but in this article, we will give you an overview of the things you need to know when you want to claim back money spent on travel that is necessary for work.

The first thing to understand is that not all travel expenses are eligible for tax relief . Notably, HMRC only allows full tax relief on travel expenses that are "wholly and exclusively" for business purposes.

This means that if you mix business and personal travel, you will need to apportion the costs to determine which parts of your trip are eligible for tax relief.

Let's clarify which expenses HMRC recognises as business-travel expenses. These are costs that you incur while travelling for work purposes, such as:

• Train, bus, or airfare
• Car or van rental
• Mileage if you use your own vehicle
• Hotel or other accommodation
• Meals and refreshments (yes, this includes alcohol)
• Parking fees
• Tolls and congestion charges

One of the most common of these travel expenses is mileage. If you use your own vehicle for work purposes, you will need to keep a record of the dates and distances you travel for work, as well as the reason for each trip. The Driversnote automatic mileage log book makes tracking these things as easy as can be.

You can read all about best practices and HMRC rules in our complete guide to mileage in the UK .

Mileage tracking made easy

Trusted by millions of drivers

As a rule of thumb, if the expenses were necessary for the work that was done, and if the reimbursement does not exceed the actual expenditure or per diem rates, the reimbursement will be tax-exempt.

You will need to keep records of your expenses as proof for your employer and/or HMRC.

In an effort to simplify the process of tax deductions and reimbursements, HMRC publishes predetermined rates to cover business travel expenses. These can be used instead of being imbursed for the actual costs you incur.

A benefit to per diem rates is that you will not have to save receipts or invoices, you will simply have to be able to prove that you were on a business trip when the expenses were incurred.

There are per diem rates for both travelling within the UK and to other countries. In the UK, the HMRC per diem rates change depending on the duration and circumstances surrounding the trip. For the rest of the world, HMRC has published a list with the rates for countries and/or cities. 

It is actually possible to negotiate higher rates than the standard ones set by HMRC. But this will require time and legal work.

If you incur travel expenses while doing your job, you have two channels through which you can recuperate your costs.

The most common practice is that your employer will reimburse you.

If you are not reimbursed in full, or at all, by your employer, you then have the option to claim tax relief on the remaining expenses you incurred because of your business travel.

If you are a sole trader your business-related travel expenses are deductible from your taxable profits. What qualifies as travel expenses and the amounts that can be claimed for them follow the same rules as they would for an employee.

As long as you either reimburse your employees’ actual business-travel-related costs, or pay them after the per diem rate (either the standard one or a bespoke one you have negotiated with HMRC), you will not have to report or pay taxes on the reimbursement, as per HMRC’s website .

You will, however, need to keep records of all expenses and benefits you provide to your employees. This includes records of when and why the travel took place, along with receipts where possible.

How to automate your mileage logbook

Latest posts

Advisory fuel rates 2024.

• HMRC Mileage Rates 2024
• How To Pick The Best Mile Tracker App

Automate your logbook

Related posts, per diem allowance.

Learn what a per diem allowance is, how it works in the UK and how much you can receive according to HMRC. Per diem allowance definition.

HMRC Mileage Guide

Welcome to our guide on mileage claims and reimbursement in the UK. This guide will walk you through the rules that apply to your situation

HMRC has published the revised advisory fuel rates, applicable from 1 March 2024. See how they apply to your situation.

Choose your Country or region

HMRC Subsistence Rates: Everything You Need to Know

Getting to grips with HMRC subsistence rates is key for any UK business, but it can feel like a lot to take on. 

What expenses can you claim for? How do these rules impact your budget? This guide aims to simplify things. 

We’ll walk you through:

What are HMRC Subsistence Rates?

Is meal allowance taxable in the uk, how hmrc subsistence rates affect your business budget, hmrc meal allowance rates for 2023/2024, international meal & room allowance rates for uk businesses, how to report subsistence allowance to hmrc, best practices for managing travel expenses, streamlining travel expense management with expensein.

With clear, easy-to-follow advice, we’re here to help you navigate these rules with confidence, making sure your business stays on track and in line with HMRC regulations.

The HMRC offers a handy set of guidelines for businesses that allow them to reimburse employees for certain work-related expenses. This is what we call subsistence rates . 

Essentially, HMRC subsistence rates are pre-set amounts that businesses can pay employees for travel costs without jumping through hoops every time for approval.

What Qualifies for Meal Expense Claims?

The expenses for meals or beverages must be paid for after the commencement of the work-related trip.

The trip must be outside of their regular commute and must be undertaken for official business purposes.

The travel must require the employee to be away from their usual workplace for a minimum of 5 hours.

Note : Starting from April 2019, HMRC has eliminated the need for businesses to present receipts for all expenses related to a business trip. This change means less paperwork for everyone involved - from business owners to finance teams to the employees filing claims.

Good news - since 1998, they're not. This means when your employees travel for work and eat out, these meal costs won’t be taxed.

For businesses, this is a win-win. If your meal expenses tick all the boxes we talked about before, you can subtract these costs from your total taxable income. Essentially, you're left with a lower taxable amount, which could mean paying less to HMRC.

If no actual meal or drink is bought.

If the meal expense isn’t extra to what you'd normally spend.

If you're using the "staying with friends or relatives" allowance.

If meals are eaten at home.

If meals are included as part of a training course, conference, or similar.

If your meal is included in the cost of your train or plane ticket.

Changes to HMRC subsistence rates play a big role in shaping your company’s budget, especially if your team often travels for work. 

Here’s what you need to know:

If these rates go up, you'll find that the costs for meals and small expenses during trips increase, which could bump up your overall travel and expense budget.

A decrease in rates, on the other hand, might give you a bit more wiggle room in how you allocate your budget.

It's super important to stay on top of these rate changes to make sure your business stays on budget and follows HMRC rules.

So, what can your business do to adapt?

Tips for Adapting to Changes in HMRC Subsistence Rates

Perform regular policy reviews. Keeping an eye on your travel and expense policies can help you spot where you might need to make some tweaks. Maybe it’s time to set some spending limits, tighten up approval processes, or encourage choosing less pricey options for meals and incidentals.

Use technology to your advantage. Leverage an expense management system to track and manage employee travel expenses efficiently. These tools can automatically update changes in subsistence rates, ensuring financial compliance and simplifying the reimbursement process.

Educate your team. Keep your employees informed about the importance of adhering to the updated subsistence rates and company policies. Regular training sessions can help ensure everyone is on the same page and can help reduce overspending.

Negotiate with vendors. For businesses with significant travel needs, negotiating rates with hotels and meal providers can lead to cost savings that help offset changes in subsistence rates.

Plan for contingencies. Always have a contingency budget for unexpected changes in subsistence rates or travel needs. This ensures your business can adapt without compromising on financial stability.

For travels lasting 5 hours or more : The maximum claimable meal allowance is £5.

For durations of 10 hours or more : A £10 meal allowance is applicable.

If away for 12 hours or more : You are entitled to a £15 meal allowance.

For a full 24-hour period or longer : The meal allowance reaches a maximum of £25.

The HMRC calculates these durations from the moment one departs from their home or primary workplace until their return.

Note : These HMRC travel and subsistence rates apply only to travel within the United Kingdom. For a comprehensive list of recommended allowance rates by country, visit the HMRC website .

For UK-based businesses with employees who travel internationally, HMRC offers a detailed list of suggested meal and accommodation allowances by country . 

Below, we’ve summarised the rates for some top business travel destinations to help with your planning:

United States (USD):

Meal allowances range from $21 to $34.50 for a duration of 5+ hours, and room rates vary, with cities like Boston and New York City on the higher end at around $239 and $216 respectively.

Canada (CAD):

Canadian cities like Ottawa and Toronto offer meal allowances from $38.50 to $47 for 5+ hours, with room rates up to $224 in Vancouver.

Europe (EUR):

In European cities, meal allowances for 5+ hours stretch from €22 in Berlin to €40 in Paris. Room rates in Paris are around €199.50, showcasing the variety across different cities.

In China, cities like Bangalore and Beijing provide meal allowances from ₹1685.50 (INR) and ¥232 (CNY) for 5+ hours, respectively. Room rates can go as high as ¥1344.50 in Beijing and ₹16809.50 in Bangalore.

In Singapore, a 5+ hour meal allowance is SGD 91.50 with room rates at SGD 318.

Hong Kong stands out with meal allowances of HKD 292.50 for 5+ hours and room rates reaching HKD 2376.50.

HMRC's guide includes how to utilise these rates for reimbursing employees for international business travel and reporting these expenses. 

This concise overview is to give businesses a quick reference to budget for travel expenses in various global cities.

When it comes to reporting your business's subsistence allowance spending to HMRC, the process folds into your usual end-of-year financial reporting. 

Specifically, you'll need to fill out a P11D form for each employee who has received expenses or allowances, such as per diem or meal allowances, over the tax year. In some cases, you might also need to complete an additional P11D(b) form.

Your team must submit their expense reports regularly , ideally after each business trip, to account for any subsistence expenses. 

Due to the broad nature of what can count as subsistence expenses, it's important to vigilantly review these claims. This helps in preventing false or exaggerated claims and ensures the integrity of your expense reporting against any potential fraud .

Visit HMRC’s website for a detailed guide on how to report expenses and benefits .

Create a clear travel policy : Draft a travel and expense policy that spells out what’s covered, spending limits, and how to get expenses approved. Make it as clear as possible.

Educate your employees : Make sure everyone knows the policy inside out. Offer guidance on how to spend wisely while travelling for work.

Opt for cost-effective options : Encourage the team to save money where they can, like booking hotels early or choosing budget-friendly meal options.

Leverage technology : Tap into technology with expense management software. It makes tracking employee spending and getting reimbursed much simpler.

Regularly review and update your policy : Regularly check and tweak your travel policy to make sure it’s up to date with the latest rules from HMRC and matches up with what’s happening in the travel world.

With these strategies, businesses can better manage their travel expenses , ensuring they stay economical and in line with HMRC standards.

For businesses looking to get a handle on travel and expense management, ExpenseIn is a game-changer.

What Makes ExpenseIn Stand Out?

Effortless expense tracking : No more wrestling with spreadsheets. ExpenseIn brings everything into one place, making it easier to create, approve, and report on expenses.

On-the-go claims submission : With its mobile app , submitting expenses is as easy as snapping a picture, whether it’s for a taxi ride or a business lunch. Plus, it automatically works out mileage and even how much carbon you’re using.

Real-time reporting : Get a clear view of your spending with real-time reports . This means you can see where money is going and make smarter budget decisions.

Automated workflows : ExpenseIn automates the boring stuff - like checking receipts and reminding you of policy rules - so you can focus on more important tasks.

Integration capabilities : It easily syncs with the other tools and systems you’re already using, smoothing out your workflow.

By bringing ExpenseIn into your business, you’re not just streamlining how expenses are handled; you’re also making life easier for everyone involved. It’s about spending less time on paperwork and more time on what matters, supported by a team that’s got your back every step of the way. 

Secure, compliant, and ready to integrate - it’s how travel expense management should be.

Book a free demo of ExpenseIn today to see how ExpenseIn can help streamline your travel and subsistence expense processes.

Explore our faster, simpler and smarter approach to travel expense management.

Related stories, a guide to employee travel expenses.

8 Top Tips to Increase Compliance with Your Company's Travel Expense Policy 

Claiming Back Travel Expenses from HMRC: A Step-by-Step Guide for Businesses

Are Travel Expenses Getting Out Of Control in Your Business?

Sign up to stay in the know

Subscribe to our newsletter and get the latest ExpenseIn news and expense management insights straight to your inbox.

Reimbursements

Travel Expenses in the UK: An Overview 

Anyone undertaking a business trip for the employer usually has expenses for this trip – be it for meals, accommodation, or transport. Under certain conditions, these travel expenses are tax-deductible. Our guide reveals which specific conditions apply, which travel expenses can be claimed, and which solutions companies can use to simplify business travel for their employees.

Travel expense policies – this must be considered

In 2020 and 2021, business travel plummeted due to COVID-19. In 2023 we’re seeing business travel return to normal as the effects of the pandemic fade. Although it is unlikely that there will ever be as many business trips in the future as before, there are still issues best discussed and settled in person. Not every social interaction can be replaced by a Zoom meeting. For such business trips, it is crucial to know what the fiscal opportunities are, both for the employee and for the employer.

Travel expenses are usually exempt from tax by HMRC. To claim expenses incurred for tax purposes, corresponding receipts must therefore be kept and submitted. After all, it must be possible to prove these costs. An overview illustrates what kind of travel expenses are affected by the tax exemption.

Tax exemption applies to the following types of expenses in business travel:

• public transport
• hotel accommodation
• food, as well as drinks
• congestion and toll charges
• parking fees
• professional telephone calls
• printing costs

All these sorts of costs can be exempted from tax at HMRC, provided they are incidental to business travel. However, it is not always possible to distinguish clearly between a mere business trip and a business trip with partly private share – or to determine which expenses incurred on a business trip are of a private nature.

Reimbursements with Moss: More freedom for your team

Distinction of business and private travel

For HMRC, there are only two kinds of travel considered to be business travel and which can accordingly benefit from tax exemption: one being trips undertaken by employees in the course of their professional duties – for example, client meetings. The other is travel to some place where their presence is required to fulfil duties – this includes, for instance, visits to construction sites or temporary workplaces, as it often occurs in companies with international subsidiaries.

Please note, however, that the daily commute from home to the permanent place of work is explicitly not considered a business trip. Only travel that goes beyond this regular routine and is consequently of limited duration is considered as such. Furthermore, if a trip is made that actually does not lead to the permanent place of work, but is approximately the same distance, this trip cannot be taken into account for tax purposes either.

The following table provides a clear overview of which expenses on a business trip are of a business and which are of a private nature. A distinction is made between costs that can be exempted from tax and those that are not deductible.

UK travel rules for employees

If the costs of a business trip are incurred by an employee and are not covered by the employer, the employee has the option of reclaiming the taxes from the government. 

There are different requirements to be met:

• The travel expenses exclusively incurred for work-related reasons.
• The employee has covered these travel expenses personally.
• The employer does not reimburse the employee for the travel expenses.
• The employer has not provided the employee with a suitable alternative.
• The employee pays taxes.

The last aspect is especially significant: the regulation involves a tax relief. A tax relief, in turn, implies that taxes are paid in the first place. The relief depends on the amount of tax paid and the tax rate. The relevant expenses and, if applicable, supporting documents must be submitted within four years of the end of the tax year in question.

For example: If travel expenses amount to £60 and the employee has a tax rate of 20 per cent in the year in which the expenses were incurred, then the employee can claim a tax break of £12.

Permanent and temporary workplaces: travelling time is decisive

As mentioned above, a basic distinction must be made between permanent and temporary places of work to determine whether travel expenses can be claimed. What constitutes a permanent workplace is obvious in most cases: the office, shop, or factory where the work is done every day. A temporary place of work, on the other hand, is one that is only visited occasionally or only for a short time before returning to the permanent workplace. The regulation only applies up to a period of 24 months. After that, the place of work is no longer considered temporary and thus can no longer be taken into account for tax purposes.

Corporate travel and expense management: provisions for employers

Employers also have the option of claiming their employees’ travel expenses for tax purposes – provided they have covered their costs. To do this, they must report the expenses to HMRC.

Employers must take certain things into consideration:

• To deduct the costs of their employees’ business trips , these must have a distinct and exclusive business origin and must not serve private pleasure.
• The business trip itself may have a private share – but only the professional expenditure can be claimed for tax purposes.
• If private expenses, such as transport to a private destination, are covered, this is considered employee compensation and is then relevant for National Insurance.
• The expenses for fuel or food are legally set at fixed rates. If the employer reimburses the employee more than these fixed rates, the difference is considered remuneration and thus a kind of wage and is therefore subject to PAYE and National Insurance.

The prerequisite for keeping track of all this and for being able to allocate costs correctly is proper corporate travel and expense management . In combination with accounting software such as XERO, employees’ business trips can thus be easily managed.

Travel expense management: fixed rates and exceptions

Not all expenses are deductible in their entirety. Certain types of travel costs can only be deducted at a certain amount set by HMRC. These fixed rates are intended to prevent business travellers from financing a dissolute life at the expense of the state. These fixed rates apply in particular to meals and fuel.

The first expenditure item for which HMRC determines how much businesses can claim in tax is fuel. Since the efficiency of vehicles may vary considerably, as does the price of fuel depending on the type of fuel, HMRC has set limits up to which companies can refinance the fuel costs of their employees tax-free – for example, on business trips in a company car. Or if employees must repay the employer after private journeys with the company car. In both cases, the advisory fuel rates apply.

These advisory fuel rates are usually adjusted on a quarterly basis, depending, among other things, on the latest fuel price development. Various factors contribute to the calculation: type of fuel, size of the engine, or fuel consumption. The rates can be found on the HMRC website. Currently, they range between 9 and 25 pence per mile travelled, except for electric cars, which are charged 5 pence. 

Costs for Food

The same applies to meals: companies can cover their employees’ expenses and thus save tax. However, HMRC sets limits on the extent to which this is possible. For example, if employees eat a particularly expensive meal, companies do not have to pay the full cost.

You have several options to refinance your employees’ expenses for meals: 

• You bear the costs at the rate set by HMRC.
• You negotiate an individual rate with HMRC if, for example, the company needs to have its employees dine at particularly expensive venues for representative reasons.
• You pay the full cost for your employees but can only deduct it up to the maximum amount set by HMRC.

The amount of the fixed rates for meals depends on the length of the journey.

There is also a cap of £5 for breakfast. For dinner after 8pm the cap is £15, as it is assumed that the employee works longer hours than usual and cannot eat at home.

Moss: travel and expense management made easy

Moss makes corporate expense management much easier. With Moss Corporate Cards , employees can make instant payments on behalf of the company when travelling on business – without having to advance any money – and then reclaim it from the employer later. They can upload the corresponding receipts via the web and mobile app to be stored in the application.

The employer can collate the documents and has access to them whenever they are requested by HMRC. And the accounts department can easily export them to accounting software such as XERO and match them with payments, without having to request the receipts from the employees themselves.

When employees enter their travel data in the application, Moss will also automatically calculate the flat rates and per diems of the trip, depending on the length of the business trip and the destinations. If employees should pay in advance and submit the relevant data to Moss, the employer can reimburse the costs with just a few clicks and immediately credit the employee’s account – or transfer the sum along with the next salary.

Reimburse with Moss: Give freedom to your team

There are several types of expenses during a business trip that may be exempt from tax. These include public transport, hotel accommodation, meals as well as drinks, congestion and toll charges, parking fees, professional telephone calls, printing costs, and mileage. Depending on the specific kind of expenses, they will be reimbursed either in full or at fixed rates set by HMRC.

The rates for meals depend on the length of the trip. From five hours, £5 can be claimed, from 10 hours £10, and from 15 hours £25. For breakfast, a rate of £5 applies, for dinner after 8 p.m. it is £15. Abroad, however, rates vary from country to country and sometimes city to city, depending on the local cost of living.

The fuel costs you can deduct per mile on a business trip in a company car depend on various factors – such as the size of the engine, fuel consumption, and type of fuel. HMRC’s fixed rates currently range between 9 and 25 pence but change quarterly according to the prevailing fuel prices. The fixed rate for electric cars is 5 pence per mile.

Business travel is any travel that serves a distinct professional purpose. These can be short business trips to meet with business partners or trips lasting several weeks that require an employee to work on the go – such trips can be deducted for up to 24 months. Commuting between home and permanent place of work is not considered a business trip.

Various types of travel expenses are tax deductible – from public transportation and hotel accommodations to congestion, toll, or parking fees. The tax exemption is determined by the amount of the expenses. Fixed rates set by HMRC apply to meals and mileage in company cars.

Certain conditions must be met for the reimbursement of travel expenses: The expenses were paid in full by the employees themselves. The costs are work-related and did not serve private pleasure. The employer did not reimburse the expenses and did not offer a suitable alternative. And the business traveller is a taxpayer.

• Latest Posts

Our digital content is for information purposes only and does not constitute legal or tax advice. All content is compiled with the utmost care. However, they do not replace binding advice and are not guaranteed to be correct or complete. We do not assume any liability. For individual advice, please consult a lawyer or tax advisor.

Related Posts

Data Protection | Imprint | Terms & Conditions | Cookie Consent

This card is issued by Transact Payments Limited pursuant to licence by Mastercard International Incorporated. Transact Payments Limited is authorised and regulated by the Gibraltar Financial Services Commission. Mastercard is a registered trademark and the circles design is a trademark of Mastercard International Incorporated.

What is the HMRC 24-month rule for expenses?

Table of Contents

What is the 24-month rule?

How does hmrc define a ‘temporary workplace’, temporary purpose, limited duration, how to work out 40% of ‘working time’, additional considerations for your business, how to manage your travel expenses better.

Learn more about HMRC’s 24-month rule on travel expenses for your business and make sure you can save money. 

We’ll cover everything you need to know about tax relief on certain travel expenses, including the 24-month rule. Discover:

• What the 24-month rule is
• How HMRC defines a ‘temporary workplace’
• How to manage your travel expenses better with Countingup

HMRC provides tax relief (to reduce the amount of tax you owe) on travel expenses that are part of necessary business travel but are not part of otherwise normal operations. One way HMRC recognises this is through temporary workplaces.

The ‘24 month rule’ is one of the requirements HMRC holds temporary workplaces to before employees and businesses can deduct travel expenses successfully; however, there are others. Therefore, even if your working pattern fails the 24-month rule, you can still deduct travel expenses from your costs. 

HMRC defines temporary workplaces as follows:

“If an employee goes there only to perform a task of limited duration or for a temporary purpose .”

Business owners are eligible for travel-related expense relief via either of these temporary workplace definitions. Therefore, don’t be alarmed if you’ve spent lots of money, seek to claim it back and fail the definition for ‘limited duration’ (or ‘temporary purpose’) as you may still be eligible via the other definition.

HMRC takes into account the 24-month and 40% rules during workplace definitions so knowing how both work is important. 

HMRC defines ‘temporary purposes’ as ‘self-contained visits’. Here, consider whether or not you’ll be able to fulfil or fix in a single journey the issue(s) that took you there in the first place.

For this reason, HMRC allows regular visits to the same temporary workplace if they’re for necessary work purposes, but the journeys happen infrequently. For example, if your business has to regularly conduct quality control measures on a production unit or retail space. These sorts of visits fall under a ‘temporary purpose’ because your visit’s purpose is fulfilled once the inspection is complete. HMRC has various useful examples here .

HMRC has an open definition for ‘limited durations’, with the ‘24-month rule’ being a reference point for work projects.

• If your expected work duration is less than 24 months: HMRC allows more intensive work to be undertaken and will provide tax relief from travel expenses. HMRC terms this ‘continuous work’ wherein a business owner or employee spends more than 40% of their working time at a new workplace. If this >40% time threshold continues beyond 24 months at the same workplace, HMRC considers this a permanent workplace and no longer provides tax relief.
• If your expected work duration is more than 24 months: HMRC requires work to be undertaken for less than 40% of working time. While HMRC does not specify any upper limit (therefore, this less intensive work arrangement at a newer location can continue for longer than 24 months with tax relief provided), a specified end date must be detailed. Otherwise, with no end date provided, HMRC will consider this an additional permanent workplace and provide no tax relief.

In the first example, HMRC recognises the cost businesses incur to set up new premises. For example, you would be able to claim travel expenses if you’re setting up a new office or location for your business and you’re expecting to hire, train and establish a team within 18 months. This is because you’re expecting to be finished sooner than the 24 available. 

However, you can claim tax relief for a new temporary workplace if you undertake a work project for less than 40% of your working time for more than 24 months. For example, working 16 hours out of 40 for 36 months.

HMRC has several useful examples here .

HMRC does not specify a set number of hours or working days as a threshold for what is or isn’t ‘40% of working time’. 

This is to reflect working arrangements that are project-based and may fall outside of typical working expectations or where business owners work as long as they need or want to. Therefore, travel expenses eligible for tax relief need to accurately reflect either of the two circumstances outlined above for your own business. To calculate your business’ 40% threshold, start with the number of hours you expect your project to take while at your new temporary workplace. Now, divide this by the number of hours you spend working in total at all other permanent workplaces, then times this figure by 100. If your value is less than 40, you can claim travel expenses for the duration of the project. If your value is over 40, you can claim expenses as long as the project duration is less than 24 months long.

HMRC specifies that if a work location is deemed a temporary workplace via ‘temporary purposes’ or ‘limited durations’ (see above), you must consider the following additional rules. These may affect your eligibility for tax relief as they are caveats to what working arrangements fall under ‘temporary purposes’ or ‘limited durations’.

• Fixed term appointment rule
• Depots and bases rule

Ensure to double-check if your business’ travel demands or work pattern is reflected in these rules and speak with your accountant for more information.

Take a load off your mind and make sure you never miss a business expense again with Countingup.

Countingup is the business current account that comes with free built-in accounting software. With all your financial information in one place, you can automate your financial admin to save time and stress from your business. All this and more will help you when claiming travel expenses.

Countingup offers real-time profit and loss reports, so you can see expenses for your business when they happen. Countingup also comes with expense reminders and a receipt capture tool so you can make sure your business’ accounts are always up to date and accurate. Gain complete confidence in your business’ finances. Find out more here and sign up for free today.

• Counting Up on Facebook
• Counting Up on Twitter
• Counting Up on LinkedIn

Related Resources

The best investment platforms for uk beginners.

Disclaimer: This article does not offer financial advice and shouldn’t be taken as

How to start investing

Investing your money is one of the most reliable ways to build wealth

What does liquidating your assets mean?

You may know that an asset is something of value that your business

Things to consider when using personal assets for your small business

While you may prefer to keep your business assets separate from your personal

What is third party car Insurance?

Can you save money by taking out third party insurance on your vehicle?

What is the gig economy?

The term “gig economy” is used a lot these days. But what does

Can I claim Universal Credit if I’m self-employed?

Can you claim Universal Credit if you are self-employed? The simple answer is

The 50/30/20 budget rule: everything you need to know

When it comes to managing your finances, there are many approaches to choose

HMRC Travel Expenses & Temporary Workplace Rules

• 11 May 2022

IN THIS ARTICLE

Employees who travel for work purposes may be eligible for tax relief on travel expenses that are not reimbursed by their employer.

The general rule is that travel expenses between an employee’s home and workplace are not allowable under HMRC rules, while expenses for travel between the employee’s home and a temporary workplace may be allowable, providing certain conditions are satisfied.

In this guide for employers, we outline HMRC’s rules on claiming tax relief for travel expenses to temporary workplaces and explain the so-called ’24-month rule’.

Claiming tax relief on travel expenses

The Income Tax (Earnings and Pensions) Act 2003 (ITEPA) states that in order for a travel expense to be allowable, it must satisfy one of two tests:

• It is “necessarily incurred in the performance of duties” (ITEPA s.337)
• The travel is “for necessary attendance” (ITEPA s.338)

  Additionally, the employee must be “obliged to incur and pay them as the holder of employment” (ITEPA s.337(1)(a) and 338(1)(a)).

Generally speaking, there is no tax relief available to employees for the costs of “ordinary commuting”. This has been defined as travel between the employee’s home and permanent place of work.

However, there are journeys which are made in the “performance of duties”, which can include trips between the office and another work location, such as visiting a client or customer or other “temporary workplace.” An example of this might be a solicitor visiting clients at home or attending court.

The word “temporary” is important here and has a specific meaning in tax law that is not the same as the ordinary, natural meaning of the word. HMRC describes a temporary workplace as being where employees are required to undertake any work at another location for a temporary purpose as part of their “core” employment.

Temporary and permanent places of work

Most employees have no problem identifying their permanent place of work because it is the place they regularly go to work. Perhaps it is an office, factory or retail outlet, but notably it is the venue the employer expects their employee to be. Some employees may have more than one permanent work venue, for example if their employer requires them to work in more than one location.

A temporary workplace is classed as a location where the employee attends irregularly or for a limited amount of time. For example, an employee who works in Leicester is required to work in Nottingham for a year. The Nottingham location would be classed as a temporary workplace under the rules.

However, the temporary workplace rule ceases to apply if the employee works at an alternative location for a continuous period of work over 24-months. This is known as the 24-month rule. The law defines a period of continuous work as a period during which the employees’ duties are performed to a meaningful extent at a particular workplace.

HMRC considers duties are performed to a meaningful extent if the employee spends 40% or more of their time at that workplace. Complications can arise where employees spend less than 40% of their time at a temporary workplace as to whether the 24-month rule applies. It may be wise at that point to seek advice from an accountant as to the particular circumstances.

The 24-month rule

This is a specific condition that allows employees to claim travel expenses for journeys between the employee’s home and their temporary workplace. The idea is that visiting somewhere other than a permanent workplace can lead to undue costs for the employee. HMRC views travelling to a temporary workplace as a legitimate business expense.

The 24-month rule has two notable conditions which must both be met in order for an employer to NOT be eligible to claim travel expenses:

• The employee must have spent or is likely to spend more than 40% of their working time at a work location, AND
• The employee must attend or be likely to attend the venue for a period lasting more than 24 months.

  If both of these criteria are met, the employer cannot claim tax relief on travel expenses to and from a place of work. So, if the employee spends more than 40% of their time at a work venue for over 24-months, HMRC class it as a permanent workplace.

As soon as the employer knows a contract will last longer than 24-months, they must stop claiming tax relief. This means that if the employer knows the contract at the alternative location will last at least two-years, they cannot claim from the start.

24-months is the total calendar period, and not the actual amount of time the employee spends working at the location. For example, if the employee works for two days a week commencing on 1st January, or if they work six-months on and then six-months off, they will reach 24 months on 1st January two years after. This continues to be the case even if new contracts are signed along the way.

In the example given above, the 40% rule would still apply. So a break of 15-months (60% of any two-year period) would be sufficient to make sure the 24-month rule does not apply. If the contract length is unclear, tax relief is available if it is assumed the agreement to work at the temporary location will not last more than 24-months.

As it is possible to have more than one permanent workplace, if the 24-month rule is met, the workplace is automatically deemed permanent, even if the rule can also be met in other work locations.

Tax relief is not available for private travel. This is defined as travel to any place that an employee does not need to be for work purposes.

Qualifying travel expenses

The 24-month rule prevents receipt of tax relief on travel expenses to temporary workplaces. But in order to claim tax relief, the employee must have had to incur the travel expenses in the first place.

Travel expenses for employees are tax deductible when certain conditions are met:

• Employees personally pay their own expenses receiving no reimbursement from their employer
• The employer reimburses any travel expenses paid for by the employee
• The employer pays the costs directly on the employee’s behalf
• The cost is met by travel tickets or credit tokens provided to the employee
• Travel facilities, such as accommodation, are provided directly to the employee.

  Travel expenses include the actual cost of the journey and all other associated costs such as food, accommodation, toll fees, car parking, taxis or vehicle hire charges.

Which travel expenses are allowable?

Site-based employees.

This is a category of employee who carry out their duties across several sites and means their place of work does not readily fit neatly into the definition of what is and what is not a temporary workplace within ITEPA guidelines. Each site must be examined on the facts and a determination made as to whether they are temporary or permanent sites. If it is deemed to be permanent, then under the rules, travel expenses are not allowable.

Ordinary commuting

Travel from home to a place of work is not allowable for tax purposes unless it meets one of the listed exceptions. If an employee is on secondment, their travel expenses may be allowable, but so long as an employee has chosen where they work (e.g., not on secondment) and choses where they live, there is no tax relief for the costs of travelling to and from work.

Travel cards

The underlying requirement of the expenditure must be considered, simply because an employee uses their existing rail season ticket for visiting a client utilising the same ticket, does not make part of the ticket’s cost allowable. However, if the employee is required by their employer to incur a higher level of expenditure above their ordinary commute, then the extra amount is allowable.

Accompanying spouses

If the employee’s spouse accompanies them, then those expenses are generally not allowed, unless the spouse’s travel meets the requirements. This is whether the travel expenses have necessarily been incurred for the purposes of the employment or are incidental to it. Such situations are rarely encountered, and more general reasons for spouses to travel are more likely to arise from attending particular functions, where the employee’s requirement to attend on their own is not enough. If an employee is travelling overseas, then the additional costs of their accompanying spouse may be allowable.

One-off visits

If an engineer has to visit a customer to check some equipment, for example, the travel costs are allowable. Employees who are required to visit customers or suppliers, attend training events, meetings or perform other visits expected of their role, then travel expenses are allowable.

Travel obligations

For those employees who are required to travel between work locations as part of their employment, travel costs are allowable.

Area employees

If an employee is responsible for an area over which they perform their duties, the travel costs within that area are allowable.

Travel between group employments

Where the employee is employed by a group of companies (holding company and 51% of subsidiaries), the directors or other employees may have to travel between locations to carry out their duties. Those employees are entitled to deductions for the cost of travelling to the other group companies for that purpose. The rules surrounding group companies are technical and complex, so it may be sensible to read through HMRC travel expenses temporary workplace guidance, if there is any doubt.

Level of reimbursement

If an employee is reimbursed excessively for their expenses, it will give rise to one of two situations:

• If the employer reimburses expenses above the level of expenditure incurred by the employee, then the excess must be treated as earnings and included in payroll.
• If the employer reimburses expenses for particularly lavish or extravagant travelling arrangements, it may result in a benefit charge on the employee.

  However, if the employee has incurred extra or additional expenses which have not been reimbursed by their employer, then the employee can claim relief. For example, if the employee has been reimbursed £150 towards a £200 train fare, the employee can claim tax relief on the excess £50. This is either done via the employee’s tax return under “employee expenses”, or, if the employee is not required to complete a tax return, they can claim relief on form P87, an excess expenses form.

Breaks in attendance or location

A break in attendance or location, however long or short, does not reset the clock. If the employee is returning to a previous place of work, time continues to run. This is because 24-months is the total calendar period, and not the actual amount of time the employee spends working at the location.

The 24-month rule clock can be reset provided there is a significant change in the commute or location. HMRC does not define what amounts to a significant change, so employers will need to determine this on a case-by-case basis. Resetting the 24-month rule only applies to limited companies that intend to be at a location or venue for over 24 months.

If this is the case, the employee can then revert to the 40% rule, which requires determination as to the length of time they will be away from that location in order for them to claim in the future.

HMRC 24-month rule & travel expenses rules FAQs

[wp-faq-schema accordion=1]

Legal disclaimer

The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal or financial advice, nor is it a complete or authoritative statement of the law or tax rules and should not be treated as such.

Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission.

Before acting on any of the information contained herein, expert professional advice should be sought.

Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law , Tax , Human Resources , Immigration & Employment Law .

Gill is a Multiple Business Owner and the Managing Director of Prof Services Limited - a Marketing & Content Agency for the Professional Services Sector.

• Gill Laing https://www.taxoo.co.uk/author/gill/ Tax on Reselling & Side Hustles
• Gill Laing https://www.taxoo.co.uk/author/gill/ Capital Gains Allowances & Reliefs 2024
• Gill Laing https://www.taxoo.co.uk/author/gill/ Self Assessment Deadline Reminder: 31 January 2024
• Gill Laing https://www.taxoo.co.uk/author/gill/ £40000 After Tax in 2024

Subscribe to our newsletter

Filled with practical insights, news and trends, you can stay informed and be inspired to take your business forward with energy and confidence.

Taxoo is a Rokman Media brand © 2024. All rights reserved.

Taxoo is a registered trademark of Rokman Group Limited and may not be used by third parties without permission.

Website by Prof Services

Type above and press Enter to search. Press Esc to cancel.

Cookies on GOV.UK

We use some essential cookies to make this website work.

We’d like to set additional cookies to understand how you use GOV.UK, remember your settings and improve government services.

We also use cookies set by other sites to help us deliver content from their services.

You have accepted additional cookies. You can change your cookie settings at any time.

You have rejected additional cookies. You can change your cookie settings at any time.

• Money and tax

Claim tax relief for your job expenses

You might be able to claim tax relief if:

• you use your own money for things that you must buy for your job
• you only use these things for your work

You cannot claim tax relief if your employer either gives you:

• all the money back
• an alternative, for example your employer gives you a laptop but you want a different type or model

This guide is also available in Welsh (Cymraeg) .

You must have paid tax in the year you’re claiming for. The amount of tax relief you get cannot be more than the amount of tax you paid in that year.

You’ll get tax relief based on what you’ve spent and the rate at which you pay tax.

Example If you claim £60 and pay tax at a rate of 20% in that year, the amount you are entitled to is £12 (20% of £60).

If your claim is for the current tax year, HM Revenue and Customs ( HMRC ) will usually adjust your tax code so you pay less tax.

If your claim is for previous tax years, HMRC will either adjust your tax code or give you a tax refund.

How to claim

How you claim depends on what you’re claiming for. Find out if you’re eligible to claim tax relief:

• if you work from home
• on uniforms, work clothing and tools
• for vehicles you use for work
• on professional fees and subscriptions
• on travel and overnight expenses
• for buying other equipment

If you’re eligible, you’ll usually be able to claim tax relief on your job expenses online.

If you cannot claim online, there are other ways you can claim .

If you complete a Self Assessment tax return , you must claim through your tax return instead.

If you estimate your job expenses

If you claim an estimated amount and at the end of the tax year the actual amount you spent is different, you must tell HMRC by: 

• submitting a new claim online - there are different ways to claim online depending on what you’re claiming tax relief on
• completing a postal form
• phoning the helpline

Related content

Is this page useful.

• Yes this page is useful
• No this page is not useful

Help us improve GOV.UK

Don’t include personal or financial information like your National Insurance number or credit card details.

To help us improve GOV.UK, we’d like to know more about your visit today. We’ll send you a link to a feedback form. It will take only 2 minutes to fill in. Don’t worry we won’t send you spam or share your email address with anyone.

An official website of the United States Government

• Kreyòl ayisyen
• Search Toggle search Search Include Historical Content - Any - No Include Historical Content - Any - No Search
• Menu Toggle menu
• INFORMATION FOR…
• Individuals
• Business & Self Employed
• Charities and Nonprofits
• International Taxpayers
• Federal State and Local Governments
• Indian Tribal Governments
• Tax Exempt Bonds
• FILING FOR INDIVIDUALS
• How to File
• When to File
• Where to File
• Update Your Information
• Get Your Tax Record
• Apply for an Employer ID Number (EIN)
• Check Your Amended Return Status
• Get an Identity Protection PIN (IP PIN)
• File Your Taxes for Free
• Bank Account (Direct Pay)
• Payment Plan (Installment Agreement)
• Electronic Federal Tax Payment System (EFTPS)
• Your Online Account
• Tax Withholding Estimator
• Estimated Taxes
• Where's My Refund
• What to Expect
• Direct Deposit
• Reduced Refunds
• Amend Return

Credits & Deductions

• INFORMATION FOR...
• Businesses & Self-Employed
• Earned Income Credit (EITC)
• Child Tax Credit
• Clean Energy and Vehicle Credits
• Standard Deduction
• Retirement Plans

Forms & Instructions

• POPULAR FORMS & INSTRUCTIONS
• Form 1040 Instructions
• Form 4506-T
• POPULAR FOR TAX PROS
• Form 1040-X
• Circular 230

Understanding business travel deductions

More in news.

• Topics in the News
• News Releases
• Multimedia Center
• Tax Relief in Disaster Situations
• Inflation Reduction Act
• Taxpayer First Act
• Tax Scams/Consumer Alerts
• The Tax Gap
• Fact Sheets
• IRS Tax Tips
• e-News Subscriptions
• IRS Guidance
• Media Contacts
• IRS Statements and Announcements

IRS Tax Tip 2023-15, February 7, 2023

Whether someone travels for work once a year or once a month, figuring out travel expense tax write-offs might seem confusing. The IRS has information to help all business travelers properly claim these valuable deductions.

Here are some tax details all business travelers should know

Business travel deductions are available when employees must travel away from their  tax home  or  main place of work  for business reasons. A taxpayer is traveling away from home if they are away for longer than an ordinary day's work and they need to sleep to meet the demands of their work while away.

Travel expenses  must be ordinary and necessary. They can't be lavish, extravagant or for personal purposes.

Employers can deduct travel expenses paid or incurred during a  temporary work assignment  if the assignment length does not exceed one year.

Travel expenses for  conventions  are deductible if attendance benefits the business. There are special rules for conventions held  outside North America .

Deductible travel expenses include:

• Travel by airplane, train, bus or car between your home and your business destination.
• Fares for taxis or other types of transportation between an airport or train station and a hotel, or from a hotel to a work location.
• Shipping of baggage and sample or display material between regular and temporary work locations.
• Using a personally owned car for business.
• Lodging and  meals .
• Dry cleaning and laundry.
• Business calls and communication.
• Tips paid for services related to any of these expenses.
• Other similar ordinary and necessary expenses related to the business travel.

Self-employed individuals or farmers with travel deductions

• Those who are self-employed can deduct travel expenses on  Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship) .
• Farmers can use  Schedule F (Form 1040), Profit or Loss From Farming .

Travel deductions for the National Guard or military reserves

National Guard or military reserve servicemembers can claim a deduction for unreimbursed travel expenses paid during the  performance of their duty .

Recordkeeping

Well-organized records  make it easier to prepare a tax return. Keep records such as receipts, canceled checks and other documents that support a deduction.

Subscribe to IRS Tax Tips

•  Facebook
•  Twitter
•  Linkedin