Travel and Subsistence Expenses
Business travel can include mileage, public transport, parking, accommodation and necessary meals. The tax treatment depends on who is travelling, the purpose of the journey and whether the destination is a temporary or permanent workplace.
Business Travel or Ordinary Commuting?
Travel required in performing work or to a temporary workplace may qualify. Ordinary commuting between home and a permanent workplace is normally private and cannot be reimbursed tax-free.
A workplace is not automatically temporary because a contract is short. The expected length, regularity and purpose of attendance must be considered. The 24-month rule can prevent relief once someone expects to spend 40% or more of their working time at a location for more than 24 months.
Using Your Own Vehicle
From 6 April 2026, an employee or director using their own car or van for business can receive up to 55p per mile for the first 10,000 business miles and 25p thereafter under HMRC’s approved rates.
The rate covers fuel, servicing, insurance, vehicle tax and depreciation. Business parking, tolls and congestion charges may usually be reimbursed separately.
If an employer pays less than the approved amount, the individual may be able to claim Mileage Allowance Relief. Payments above the approved amount can create reporting and tax obligations. Read our vehicle expenses guide for more detail.
Meals and Overnight Costs
Reasonable accommodation and subsistence may qualify where the underlying business journey is allowable. Receipts should normally be retained. Employers using benchmark scale rates still need an appropriate checking system unless HMRC has agreed otherwise.
Incidental overnight expenses have separate limits. Exceeding a tax-free limit can make the full payment taxable, so these should not be treated as general spending allowances.
Combining a business journey with a private trip does not always invalidate every cost, but the private element must be identified. Costs for a spouse or family member are normally private unless that person is travelling for a genuine business reason.
Keep Complete Records
Record the date, destination, purpose and mileage for each journey. Keep tickets, hotel invoices and receipts, and separate private elements. Missing evidence can make a claim difficult to support.
GMS Accountants advises businesses in Cambridge and Nottingham on travel expenses and reimbursements. Contact us before introducing an expense policy.
