Travel expenses for employees

Guide to travel expenses for employees

If you have employees that travel for work, you need to know which expenses you can claim. We take you through it in this quick guide.

Which expenses can you claim for travel?

In short, you and your employees can only claim travel expenses for travel as part of your duties, or to a temporary place of work. You can’t claim for ‘ordinary commuting’, when you travel to and from your workplace on a daily basis.

When you travel, you can claim tax relief on expenses like:

  • Travel like public transport costs, parking, congestion charges and tolls
  • Hotel accommodation for overnight stays
  • Food and drink, also known as subsidence
  • Business phone calls and printing
  • Business mileage in some cases

Any private or non-business expenses shouldn’t be covered, as you can’t claim tax relief on them.

How to make a travel expenses policy

Once you know what you can claim tax relief on, it’s up to you as an employer to make an expenses policy.

It’s important to keep in mind that while there are no restrictions on HMRC around how much costs can be, it should be up to you to set daily limits. For example, a set amount you can spend on subsidence or standard travel tickets instead of first class.

The only exception to this is business mileage, which is a little more complicated. HMRC has separate rules around mileage, so you should make sure your reimbursements aren’t more than their approved mileage payments.

Travel expenses should be part of your full expenses policy. When it comes to travel, you should include:

  • Which expenses you will reimburse for, and which you will not
  • Limits for expenses
  • How employees can claim their expenses

Remember to keep your policy up to date!

Manage your expenses with Bokio

With Bokio’s accounting software you can easily manage employee expenses. You’ll be able to approve or deny expenses, and easily record them in your accounting.

You have control of your business finances when your bookkeeping, invoicing, and expenses all in the same place. We have everything you need to help you prepare for your Self Assessment tax return, submit your VAT Return for Making Tax Digital and keep the right financial records. You can invite your accountant to work with you in Bokio, or we can help you find one if you need a helping hand.

Accounting is kept simple with Bokio, so you have more time to spend running your business.

Note: This article was updated August 2023