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It’s at this time of year that people begin to get twitchy about their tax return and end of year accounts. If you have not documented your spending periodically throughout the year, it’s at best a headache and, at worst, means a run in with the HM Revenue & Customs (HMRC).

Ignorance is no defence if the HMRC finds errors in your tax return and travel expenses are an area that the HMRC pay great attention to. 

When are travel expenses tax deductible? 

  • Travel expenses are only tax-deductible when either of these criteria has been met: The journey is necessary for you to be able to perform the duties of your employment. Think of it as travel that is integral to the job.
  • The journey is to and from a place where you must be in order to perform your duties but is not a standard commute or private travel. This type of journey is dictated by the duties of the employment and cannot be for personal convenience in any way. 

But what if you work from home for most of your working week? This is where issues can arise with the HMRC. In short, problems arise because travel to and from home is not deductible (yes, even if you have a home office!). Click here to learn more.

Travel expenses you can claim for include:

  • transport costs (flights, rail tickets etc)
  • mileage 
  • hotel accommodation 
  • congestion charges and tolls
  • parking fees
  • food and drink, whilst away

Travelling domestically and claiming expenses back is relatively straight forward. It becomes more problematic when claiming expenses for overseas trips. 

How to claim travel expenses for overseas trips

As with domestic trips, travel expenses for foreign trips require you to demonstrate that the trip is wholly and exclusively for work. You must always keep receipts or other permitted forms of proof of purchase to document your spending. If the HMRC suspect that you are mixing business and leisure whilst overseas, you risk having your expenses rejected.

Split leisure from business expenses

To keep your claims compliant with tax laws it is important to keep business and leisure separate. Yes, you may be heading to a destination for a conference, but the extra days sightseeing you are hoping to fit in need to be split from any business expenses incurred. This can mean that you, personally, need to pay for the flight home and the extra night of accommodation. (Remember, the criterion for tax deductible travel expenses is that costs must be exclusively for work!) 

Separate bookings for spouse/partner

If you are planning for your partner to join you on the business trip, a separate booking needs to be made. If the taxman suspects that you are spending any money for personal benefit, you will not be able to claim for it.

Claim back travel expenses in GBP

For clarity and ease of administrating, it makes sense to claim back travel expenses in pounds. The bank accurately calculates the exchange rate on the day of the purchase. This may mean that you need to provide spending evidence via your personal bank accounts but, with image-editing software/sharpie pen you can block out any unrelated transactions easily.

At A&G Corporate Travel we have over 15 years’ experience in the travel industry. During this time, we have developed processes and procedures to help clients remain compliant with the laws and regulations of HMRC and their own in-house travel policies. No aspect of business travel needs to be stressful. If you want a couple of days on the beach after a conference with your partner, it’s not a problem. We want your trip to be how you want to be – for business and pleasure.

Contact us now for a non-obligatory quote.