If you travel for business, you can claim tax relief on the expenses. Find our how by watching our video or read about it below.
Usually, you would keep the receipts to prove expenditure but, to make things easier, you can claim a fixed amount that’s been agreed by HMRC.
Read below to find out more.
What are the rules?
At its simplest, you can claim tax relief on any expenses that are incurred wholly and exclusively for business purposes.
If you’re travelling, this can include:
- Business mileage or fuel
- Road/tunnel/bridge tolls and congestion charges
- Parking costs
- Public transport
- Taxi fares
- Food and drink
- Hotel or other accommodation for overnight journeys
- Incidental costs such as business phone calls
You should keep receipts to prove the expenditure for all of these.
Can I claim for all journeys?
To claim tax relief, the journey must be for business purposes and can’t be to your permanent place of work (ie the daily commute). It must be a journey to a meeting, appointment, or a temporary place of work.
Business mileage or fuel?
If the car is owned by the business, you can claim relief on the cost of fuel – petrol, diesel or electricity.
If the car is owned privately, you can claim relief on the HMRC-approved mileage rates. For cars and vans, these are currently:
- 45p per mile for the first 10,000 business miles in the tax year
- 25p for each additional mile
If you travel by bike, you can claim using the following rates:
- Motorbikes – 24p per mile
- Bicycles – 20p per mile
You calculate the expense by multiplying the number of miles by the appropriate rate, and then claim tax relief on this expense.
Flat Rates for subsistence
For the past couple of years, there have been new rules on claiming fixed amounts for food and drink on journeys away from home. These fixed amounts are approved by HMRC and can be used instead of using exact amounts.
The rates depend on the time spent away from home on the journey and are as follows:
- Journeys over 5 hours – £5
- Journeys over 10 hours – £10
- Journeys over 5 hours and ending after 8pm – £15
- Journeys over 10 hours and ending after 8pm – £20
- Journeys over 15 hours and ending after 8pm – £25
The benchmark rates can only be used if the qualifying conditions are met:
- You must be away from your normal workplace or home for at least five ten hours
- You must have incurred expenditure on a meal and also kept a receipt.
The advantages of using the flat rates are:
- It’s easier!
- You can claim the flat rate even if you spent less
- If you spent more than the flat rate, you can simply claim the larger amount
[If you’re an employer, you’re not obliged to pay the flat rate to your employees – it’s your choice.]
How do I claim the tax relief?
As a business owner, you simply include the expenses in your accounts to reduce your taxable profit.
Your tax bill will then be reduced at the appropriate rate.
We hope you have found this useful. If you have any queries, please get in touch, we’d love to help.