As a business, your client may require you to travel as part of your contract duties – whether this involves a quick meeting on the other side of London, or an international trip for a week.
Can I reclaim the costs of travelling to my client’s regular workplace?
The costs incurred attending a permanent workplace are not an allowable business expense. However, if the workplace is considered ‘temporary’ for tax purposes, then business owner will be able to claim the costs of travel legitimately.
Most will meet the criteria for attending a temporary workplace. In order to do so, it must be expected that attendance to the workplace will be no longer than 24 months in duration. If a business owner works in more than one location at any one time, it is worth seeking professional advice as to whether travel costs can be claimed.
Importantly, new rules came into force in April 2016 to remove the ability to claim a tax deduction for travel expenses for those business owners operating their companies inside of IR35.
Can I reclaim all costs relating to business travel?
Most of the costs incurred in attending a temporary workplace are allowable.
Costs that can be claimed include:
– Train and tube fares
– Mileage allowances
– Car parking
For business owners who drive to a client’s site, claiming a mileage allowance from their company will usually work out as the most tax-efficient option. For each of the first 10,000 business miles per tax year, business owner can reimburse themselves 45p. The rate reduces to 25p thereafter.
Business owners claiming the mileage allowance will pay for costs of running their car personally – so the cost of fuel, servicing, insurance and road tax should not be claimed from the company.
Most business owners will also be able to claim the reasonable costs of their subsistence whilst attending a temporary workplace too.
What about the costs of accommodation when I’m away from home?
If you are required to work away from home, the reasonable costs of overnight accommodation are allowable. This can include the costs of a hotel or, if it makes sense to do so, the cost of renting appropriate accommodation such as a flat close to the client site.
What are Incidental Overnight Expenses Allowances?
When you are working away from home, HMRC allow a fixed rate claim of £5 per night to cover ‘incidental expenses’ such as laundry and telephone calls home.
The rate raises to £10 per night if you are working overseas so it’s important to make full use of these allowances as they can quickly add up over the space of a year.
Can I reclaim the costs of meals, etc. whilst staying overnight on client business?
Yes – a claim can be made for the actual costs incurred provided they are considered ‘reasonable’.
We can help with all of your business and personal tax and financial planning needs. For a strategic review of your finances, please contact us.
This guide was written specifically for Smart Accounting clients. Some of the information contained in this guide might not be applicable if you do not have a business managed by Smart Accounting. By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details are correct at time of writing.