<\/p>\n
Whether you\u2019re a freelancer, contractor or a small business owner, you may be called upon to work away from your normal base, occasionally or frequently. This will create travel costs for your business, while you\u2019ll also need to feed yourself. But, what are the rules when it comes to claiming for such costs?<\/p>\n
To be able to claim for travel costs, you must be travelling to a temporary<\/em> place of work. That\u2019s somewhere you visit to perform a task for a limited duration or impermanent purpose, for example, a short-term contract (but see 24-month rule below).<\/p>\n You can claim the cost of travelling for business or mileage if you use your own car (45p per mile up to 10,000 miles in a tax year; 25p per mile thereafter).<\/p>\n If you must travel on business, you can also claim for subsistence, for example, lunch or an evening meal while you\u2019re away. For overnight stays, you can claim \u00a35 per night without receipts for \u201cincidentals\u201d (\u00a310 abroad), such as a tip for a taxi driver or hotel porter.<\/p>\n If your work takes you abroad, you can claim all the costs of flights, hotels, food, etc, even if you spend a small amount of time seeing the sights at the end of your trip. So, you can claim all the costs for a four-day visit to a trade show in Las Vegas, even if you have a morning trip to the Grand Canyon at the end (but not the cost of travelling to the Grand Canyon), because the main purpose of the trip is business.<\/p>\n However, obviously, you can\u2019t claim the cost of a two-week holiday, just because you spend a morning in a meeting while there; you can only claim the direct costs of that meeting.<\/p>\n HMRC will expect to see evidence of meetings\/business activities (eg emails) if it suspects the trip is really for enjoyment rather than business.\u00a0<\/em><\/strong><\/p>\n If it\u2019s more cost-effective to rent a property instead of staying in hotels for longer contracts, this will usually be allowable, as long as there isn\u2019t any personal use or rooms used by friends\/relations, because this would mean it wasn\u2019t wholly for business.<\/p>\n There are HMRC benchmarks for subsistence, for example, \u00a35 per day for lunch, but you\u2019re supposed to ask HMRC\u2019s permission to use these. In a \u201cone-person\u201d company, I recommend claiming your actual<\/em> expenditure, because this avoids the problem of HMRC trying to claim you never spent the money.<\/p>\n Because use of debit cards and contactless payments is widespread, this is less of a problem than it used to be, when you\u2019d have to keep lots of receipts.<\/p>\n The benchmark rates are not<\/em> an allowance; they\u2019re more of an administrative convenience and you can\u2019t claim them if you make your own sandwiches \u2013 you must cover this cost.<\/p>\n You can\u2019t claim travel costs for commuting, but if your home is your business base and you travel to a temporary workplace, you can claim actual travel costs or mileage and also subsistence expenses.<\/p>\n This applies to a site where you spend more than 40% of your time. A temporary workplace is one where you are based \u2013 and always expect to be so \u2013 for less than 24 months. So, if you have two 12-month contracts at the same site, you cannot claim travel and subsistence after 12 months, because the site had become permanent \u2013 you knew you were going to be based there for two years at that point.<\/p>\n The journey is the key factor. So, a new contract at a different company, but in the same area (HMRC uses the City of London as an example), does not re-set the clock to zero. But, a change of location that brings a significant change in the journey does re-set the clock, even though it\u2019s for the same customer.<\/p>\n The more business activities you undertake at home, the more it will be established as a base for your business. HMRC could argue, in some circumstances, that a contract was at a permanent place from day one, if it looks as if it may be the only place you work. This is especially true if you\u2019re later taken on as an employee at the same site or your agency, trying to be helpful, writes that you are starting work on \u201ca long-term contract\u201d. In this case \u2013 no travel or subsistence claims would ever<\/em> be allowable.<\/p>\nWhat about working overseas?<\/strong><\/h1>\n
How much can you spend on food?<\/strong><\/h1>\n
What is the 24-month rule?<\/strong><\/h1>\n
Home office work<\/strong><\/h1>\n