Travel and Subsistence: Food for Thought

Travel and Subsistence is an important expense for many people in their everyday working lives and it is often not clear on what and when you can claim for your travel journeys. Here we delve into the world of travel and subsistence and explore HMRC’s guidelines when it comes to claiming this expenditure.

Travel

When can I claim?

Under HMRC’s guidance, relief on travel expenditure is subject to two main rules.

The first of which is ‘travel in the performance of one’s duties’ and is the clearer rule when it comes to claiming expenditure. This is for travel that is essential and necessary for work purposes. This would include journeys undertaken by a delivery person or courier or a consultant travelling between clients.

The second rule is for ‘necessary journeys to workplaces that have to be attended for work’ and is often misinterpreted. These are journeys required for work but not those deemed as ordinary commuting. Ordinary community being journeys between home and a permanent workplace (i.e. your daily commute to your office). However, journeys to and from a temporary workplace are allowable and can be claimed. The criteria for a temporary workplace are as follows;

  • The workplace is being attended for a limited duration or a temporary purpose – such as a construction site.
  • The workplace is used for to perform their duties for a significant extent of time (the “40% rule”). If this was deemed to be under 40%, it would be deemed as a temporary workplace – such as working abroad for a short period of time.They are expected to attend, or do attend, a workplace for more than 24 months.

There are other rules and tests relating to specific situations which can be found in the HMRC guidance notes.

How much can I claim?

Tax relief claims are based on HMRC’s approved rates and not your actual cost incurred. In cases where you travel in your own car, motorcycle or bicycle for work purposes there are different sets of rules. If you travel in your own car or van, you can claim 45p per mile for the first 10,000 miles with each mile over 10,000 miles win each tax year, at a reduced rate of 25p per mile. Motorcycles and bicycles can claim 24p and 20p per mile respectively for every mile of travel.

You will need to keep a record of your business mileage each year in order to support your claims.

Subsistence

In addition to travel expenditure, a journey that qualifies for tax relief will also entitle you to claim for subsistence expenditure if that is incurred as art of that journey;

  • Any subsistence costs incurred in the course of the journey.
  • The cost of meals necessarily purchased whilst at a temporary workplace – for example, daily lunch.
  • The cost of the accommodation and any necessary meals where an overnight stay is needed as part of the journey working at a temporary workplace.

You should always obtain and keep receipts for subsistence and other business expenses in order to back up your claim.

HMRC’s website provides further information and useful examples on what you can and can’t claim when it comes to travel and subsistence.

If you need more information on this topic, please speak to your Barnes Roffe contact.

 

Blog written by Nick Harden

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ICAEWThe Chartered Institute of TaxationACCAIPG