Whether it’s commuting to meetings or travelling globally to attend conferences, travel costs can be expensive. Fortunately, many businesses can claim tax relief on their travel expenses. However, there are various guidelines set in place by HMRC.
These guidelines outline what can and can’t be claimed regarding business travel. Understanding these guidelines is essential for all businesses that operate within the UK and travel for business-related purposes.
These key HMRC guidelines help you manage expenses while ensuring compliance with tax regulations. To learn more about HMRC guidelines for travel expenses, continue reading.
What are Travel Expenses?
Travel expenses are the costs incurred while travelling for business. Typically, travel expenses include money spent on food, transportation, and accommodation – among other things. If you frequently participate in business trips, it’s helpful to know what is and isn’t considered travel expenses.
If you travel to meet a client in London from another part of the UK, you could spend:
- £200 on the initial train journey, economy class
- £50 in taxi fare travelling to or from the train station
- £6.70 for a day travelling on the London Underground
It all adds up, right? But luckily, you can usually claim these types of expenses back – helping reduce your tax bills.
Can You Claim Tax Relief for Travel Expenses?
So, can you claim tax relief for travel expenses? Yes, as mentioned, you can claim travel expenses depending on the HMRC guidelines.
In most cases, businesses can claim tax relief on business travel expenses, but challenges do arise if HMRC believes that the expenses are unreasonable. This is why it’s important to follow HMRC guidelines to ensure that you’re able to claim tax relief.
HMRC Guidelines on Travel Expenses
Although HMRC allows you to claim tax relief on most expenses, your trip must be business-related.
Business travel expenses can be claimed back if you have significant proof of your spending. From flights to accommodation, all aspects of your journey must be work-related to be eligible for tax relief.
For example, if just part of your trip was for business purposes, you can only claim back the part of your trip that was for work. It’s important to separate both parts of your trip if only a portion is work-related.
If you fail to provide evidence of spending while working away, you might not be able to claim any of the costs at all. Let’s take a look at the rest of the HMRC guidelines on travel expenses in the UK.
- Ordinary commuting – claiming tax relief on expenses for your normal commute isn’t possible, regardless of how costly it is. Travelling between your home and permanent or temporary workplaces isn’t usually paid for by companies, and no costs during the journey can be claimed.
- Mode of transport – HMRC allows the claiming of expenses for various modes of transport, including trains, buses, flights, taxis, other public transport, and mileage if using a personal vehicle. Keeping a record of your car mileage while travelling for work purposes is key to accurately claim back.
- Overnight stays – if you participate in a business trip that requires overnight accommodation, expenses can typically be claimed. Be aware that HMRC might scrutinise some claims for overly luxurious hotel accommodations or excessive, unnecessary costs.
- Meals – while the cost of meals during business travel can be claimed, there are limits to what can be considered reasonable. Similar to accommodation claims, only the cost of meals necessary for the business trip is allowable.
- Record-keeping – to claim tax relief on travel expenses, you’ll need proof of payments. Receipts and invoices are typically used as proof of how much you’ve spent. Keeping accurate records is key, and without proof of expenses, you might not be able to claim tax relief.
When to Claim Travel Expenses
Travel expense claims must be made within four years of the end of the tax year in which you spent the money on your business trip. Claiming tax relief is relatively straightforward and can be done via the HMRC website using an online form.
Expert Tax Advice at DH Business Support
If you want to better understand how to claim travel expenses, allow us to help. At DH Business Support, we have years of experience dealing with tax relief. Our expert team are hard-working and friendly, offering their knowledge to clients.
We’re here to simplify the process of dealing with taxes – providing clients with everything they need to know when they pay their taxes. Our tax advice is second to none, and we work closely with clients to streamline finances.
If you’re unsure of what you can and can’t claim tax relief for regarding travel expenses, don’t worry. We understand that claiming tax relief can be difficult to understand, which is why we’re here.
To find out more about our services, please get in touch today. We’re happy to help all business types and are on hand to answer any questions!