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Travel Expenses For The Employed –
Business Mileage, Subsistence / Accommodation and Public Transport ...
Travel Expenses for the employed can include business mileage, subsistence / accommodation and public transport costs. It is important to know what is allowable when claiming travel expenses. The following points help to highlight the main topics surrounding travel expense claims.
To find out more about tax relief on Travel Expenses please follow the links below:
When can I claim tax relief (Business mileage) for travel to a temporary workplace?
If you need to travel to a temporary workplace as part of your job, you may be eligible to claim tax relief on your transport costs. This tax relief is sometimes called business mileage.
A place of work counts as a temporary workplace if:
1. You need to travel there to do your job
2. You are doing short-term work there, usually “a task of limited duration”
- In order to claim tax relief on your travel expenses to a temporary workplace, your work there must last (or be expected to last) no more than 2 years.
- If your terms of employment are a fixed-term contract of less than 2 years, anywhere you spend over 40% of your total working hours does not count as temporary workplace. This is sometimes called the “24-month rule”.
- A company base or depot does not usually count as a temporary workplace. This means you cannot claim tax relief for travelling to your company offices, but you may be able to claim tax relief on work-related journeys you make away from there.
- Before making a business mileage claim you must take into account any mileage paid to you by your employer.
When can I claim tax relief (Business mileage) for travelling to work in different locations?
- If you need to travel to different places as part of your job, you may be eligible to claim tax relief on your travel expenses.
- This includes all appointments in different locations, except those at your permanent place of work (or, for example, your company’s offices). It also includes emergency call-outs, but not usually if you are called to your usual permanent place of work.
- You cannot usually claim tax relief for expenses incurred travelling from home to a single permanent place of work.
- If your home is also your place of work, you can usually claim travel expenses for attending another permanent workplace only if your home is determined by the nature of your job. This means that if you normally work at home but travel to your employer’s place of business occasionally, you cannot usually claim travel expenses for these journeys.
- If you have to make an unexpected journey for work purpose during the time you normally work at home, you may be eligible for tax relief on travel expenses incurred at that time.
- Any mileage paid to you by your employer must be taken into account before you make a business mileage claim.
If I use public transport can I claim tax relief for a travel card?
- If you are eligible for tax relief on your travel costs, for example if you have to travel to a temporary workplace or between different workplaces, you can claim full tax relief on the cost of a travel card.
- However, you can only use this card for work-related journeys. If you normally use a travel card for ordinary commuting or personal journeys, you can only claim tax relief for additional costs incurred during eligible work-related travel.
- If you are reimbursed travel expenses by your employer this has to be taken into consideration before making a travel expenses claim.
When can I claim tax relief for Subsistence and accommodation?
- As well as claiming business mileage for work-related travel, you may be eligible for tax relief on accommodation and subsistence expenses
- In addition to charges for overnight stays, this includes the costs of any necessary meals that you purchase when travelling for business-related purposes, or whilst working at a temporary workplace.
- If you are eligible for tax relief on food and accommodation costs, these usually apply to all of these expenses while away from home on work business (including travel to and from work).
- If you are reimbursed by your employer for subsistence and or accommodation costs it is still possible to make a tax rebate claim depending on how you are paid the reimbursement by your employer.
Do I need to use the cheapest transport or accommodation to claim tax relief?
- HMRC has regulations which concern business travel and other work-related expenses including accommodation and meals.
- They do not state how much you can claim. Usually there is no upper limit on a claim for tax relief on travel costs, accommodation and meals, provided you provide full receipts and meet all the necessary requirements.
- This means you can claim tax relief on the cost of first-class (or ‘business class’) travel, if you wish. As long as you are eligible for tax relief that you claim, HMRC guidelines state that they will challenge the value of claims “only in extreme cases”.
- Tax relief can only be claimed when the main or sole purpose of the expenditure is work-related. In most cases you can only claim for your own personal expenses, which means that you cannot usually claim full tax relief on the costs of a family room or large house.
- If you are sent to work at a temporary workplace and you take your family, you would usually obtain limited tax relief based only on the value of a single person’s accommodation costs.
- If you are claiming tax relief for accommodation, the location must be appropriate. For example, you will not usually be able to claim for accommodation more than one hour’s travel away from your temporary workplace if there is suitable accommodation nearby.
- You should also note that particular limits may apply to the costs of meals if you are employed as a driver.
- The amount of travel expenses you can claim does depend on how much if anything your employer pays you. You can currently reclaim tax relief on travel expense for the last four tax years.
- If a travel expenses claim is successful you will receive tax relief at either 20% or 40% of the travel expenses figure, depending on which tax bracket you fall into.
- If you are not reimbursed any travel expenses you can reclaim tax relief on all allowable travel expenses.
- If you are claiming business mileage the current car mileage allowance that can be claimed back in the current tax year is .45p per mile for the first 10000 business miles and .25p thereafter.
- If you are reimbursed by your employer the amount paid by your employer and whether the reimbursement is taxed or not taxed has to be considered before making a claim.
- If any business mileage paid to you by your employer is taxed, then you should be able to claim the full business mileage allowance.
- If any business mileage paid to you by your employer is not taxed, the difference between the allowable car mileage allowance rates, and the figure paid to you by your employer can be claimed.
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