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Tax Relief for Travel Costs

12 October 2012

If your job requires you to travel on business you may be entitled to tax relief for your expenses.  Care should be taken to arrange business trips in such a way that maximises the relief available.  

If you haven’t already claimed, it might not be too late - it is possible to go back several years to claim the relief!

For example, as an individual, for expenses incurred in year ended 5 April 2009, the claim must be submitted before 5 April 2013 as you have 4 years from the end of the tax year in which to claim relief for travel expenses.

What is Business Travel?

Business travel can include travel between your permanent workplace and a temporary workplace as well as travel in the performance of your job, for example, when you visit customers/suppliers or attend training courses.

Getting to/from work is not part of your job but merely puts you in a position to do it.  As such, tax relief is not generally available for normal commuting.  Unsurprisingly, relief is also not available for private journeys which have nothing to do with your job!

Plan your Journey

It may be worth your while arranging business trips in a tax efficient manner by avoiding home to work travel before or after a visit to a customer.

Where you travel directly to a customer/supplier from home then travel on to your workplace, the whole of that journey will count as business travel.  The subsequent journey home however will not qualify. 

If on the other hand the journey was from your home to the client then home again, the whole return journey will qualify. 

For example:

Assuming you have a morning meeting with a client whose premises are 5 miles further on from your office, your office is 25 miles from your home, you use your privately owned car and your annual business mileage is less than 10,000 miles:

  • If you drive to the office then to the client and then from the client back to the office before returning home, you will only be able to claim 10 miles @ 45p, a measly £4.50.
  • If you drive from home directly to the client then back to the office to do more work in the afternoon, you can claim 35 miles at 45p per mile = £15.75.
  • However, if you drive from home to the client then back home to work there for the rest of the afternoon, you can claim 60 miles at 45p per mile = £27.00.

This might not be much of a saving for one journey but if you do 50 such trips a year you could be claiming tax relief on a further £1,125 a year – it doesn’t take much to start adding up!

Amount of Tax Relief

The amount of tax relief available to an individual is reduced by any amount their employer ‘makes good’.  Therefore, if your employer reimburses you fully for your business travel costs no further tax relief will be available.  Your employer will however be able to claim the reimbursed costs as tax deductible expenses in their tax return (and possibly reclaim the VAT on those costs).

If your employer has not fully reimbursed you (most commonly because they have paid mileage at a rate below HMRC approved rates) you can claim the additional tax relief by including the expense in your personal tax return or, if you’re not required to submit a tax return, by making a separate claim to HM Revenue & Customs.

Qualifying Expenses

Expenses that could qualify for relief might include:

  • Mileage allowance, at HMRC approved rates, for business journeys undertaken in privately owned vehicles (cars, vans, motorbikes or bicycles).
  • Public transport fares (bus/train/flights)
  • Hire cars to undertake business journeys
  • Hotel accommodation
  • Meals
  • Parking fees, tolls and congestion charges (but not fines or penalties)
  • Business phone calls and photocopying charges

The costs must be wholly, exclusively and necessarily incurred for business purposes.  If there is any private element (or dual purpose) the cost will not qualify - newspapers and private phone calls for instance are not allowed.

For further information about what qualifies and how to go about claiming relief for travel costs, please contact

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