Harnett Accountants Wimbledon Talk Travel Expenses

Damien has recorded another series of great tax tips videos. Today’s video tax tip from Harnett Accountants Wimbledon is on the subject of travel expenses. Travel expenses are often a source of confusion, both for employees and employers. If you are an employee, you should know what you are entitled to so that you can reduce your tax bills, and as an employer you should make sure that you are running your business in the most tax efficient way possible.

We would also like to direct you to this information published on the HMRC website, detailing what you can (and can’t!) claim travel expenses for.

“If your job requires you to travel on business you may be able to get tax relief on your travel expenses. You can go back several years to get the relief – the time you’ve got depends on whether you’ve previously sent in a Self Assessment tax return.

If you’ve got to make journeys for business purposes you can deduct your travelling expenses from your taxable income – so you’ll pay less tax.

What are business journeys

You can only get tax relief on the cost of business journeys. These are when, as part of your job:

  • you have to travel from one workplace to another – this includes travelling between your main ‘permanent workplace’ and a temporary workplace
  • you’ve got to travel to or from a certain workplace because your job requires you to

But business journeys don’t include:

  • ordinary commuting – when you travel between your home (or anywhere that is not a workplace) and a place which counts as a permanent workplace
  • private journeys – which have nothing to do with your job

If you’re not sure if a place you travel to counts as a permanent workplace telephone your Tax Office for advice.”

As you can see above, ordinary commuting between your home and your place of work does not count as an allowable tax expense, so there is no way that you can reduce your tax bills based on your daily journey to and from work, no matter how expensive it is. This is an especially big problem for people who have to drive a long distance on the motorway or travel a long way by train every day.

Travel expenses that qualify for relief

“You can get tax relief on the necessary costs of business travel like:

  • public transport fares
  • hotel accommodation
  • meals
  • tolls
  • congestion charges
  • parking fees
  • business phone calls, fax or photocopying costs

But you can’t get tax relief for things that aren’t directly related to the business journey – like your newspaper or private phone calls.”

Business mileage

“You might have to use your own car, van, motorbike or cycle to make business journeys. Your employer can give you mileage allowance payments to cover your costs – up to a certain maximum amount per mile – and you don’t have to pay tax on them. If your employer doesn’t pay you the maximum, you are entitled to tax relief on the difference between:

  • what your employer actually pays you for your business journeys
  • the maximum tax free amount that your employer could have paid you for those journeys

You’ll need to keep good records of the business mileage you do and of the mileage allowance payments your employer gives you. You cannot get relief for your actual expenses if they are greater than the allowed maximum per mile.”

All of this information is available to view on the HMRC website.

If you need advice about travel expenses, or if you run a business and need help with calculating how much you need to give your staff for business journeys, and which arrangements you need to make with HM Revenue and Customs, please call our accountants in Wimbledon on 020 8977 3883 or contact us through our website. Also you can follow us on Twitter, Facebook and Google+. Additionally, you can keep reading our daily blogs.


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