Travel and Subsistence Expenses

There are two ways to deal with Travel and Subsistence expenses for business travel:

• An employer pays their employee for the Travel and Subsistence expense incurred, tax-free
• The employee claims reimbursement via their tax return for any tax relief due

Claiming expenses for a business journey On a normal working day, mileage from home to office cannot be claimed.   An example of a business journey is if an employee travels from home to see a client, in this case 40 miles away. Even if they travel near to their office location, the full distance of 40 miles can be claimed.

Approved mileage rates are:

• First 10,000 miles a year: 45p per mile
• 10,001 + miles: 25p per mile

Employers can reclaim VAT on a proportion of this allowance if they have the relevant records.

Further qualifying travel and subsistence expenses

If an employee is expected to work at a site other than their usual workplace, they can claim travel expenses. The exception to this is if the work is expected to exceed 24 months. If this situation occurs, the employee becomes ineligible to claim expenses from the time it was known that the work would exceed 24 months.   Associated costs including meals, car parking, accommodation, congestion charges or tolls are all allowable. As long as the primary purpose for travelling is business, employees can even claim for a degree of private mileage, such as a short shopping trip on the way home.

Associated costs including meals, car parking, accommodation, congestion charges or tolls are all allowable. As long as the primary purpose for travelling is business, employees can even claim for a degree of private mileage, such as a short shopping trip on the way home.

Definition of a ‘permanent workplace’

A permanent workplace is where an employee normally goes in the performance of their duties.   It is possible to work at two permanent sites. If an employee spends more than 40% of their time at one place, it can be regarded as a permanent workplace. Each case is individual in this respect however, and in some circumstances less than 40% of the time spent at one place also counts as permanent.

Triangular journey

An example of a triangular journey is from home to a client’s office, and then to a permanent workplace. In this instance, the entire journey is classed as business travel, and expenses are claimable as long as the primary reason for the journey is for business.

Use of home as an office

If an employee’s home qualifies as their permanent place of work, travelling to their head office qualifies as a business journey, and expenses can be claimed.

Record keeping

It is important to keep receipts and all other records to substantiate claims for travel and subsistence, getting dispensations for expenses payments agreed with HMRC if possible.

If you would like any further information, please do not hesitate to contact Southside Accountants Wimbledon.