HMRC travel and accommodation costs: everything you need to know about it (2023)

Door: Jibran Qureshi Tax blog

What are the travel and accommodation costs?

Travel and accommodation costs are incurred when: adeparture of the employeebusiness goalsfrom one place to another. containstravel, meals, accommodation, laundry and other related expenses.

Since living expenses are considered an expense associated with business travel, they fall into the same category.

If you as an employee travel to another location as part of your job, you are eligible for a certain amount of travel and accommodation costs based on your job group or designation.

However, before the actual trip begins, employees must provide a list of expenses that may be incurred during the trip. These special costs are eligible for reimbursement if you work for an organization or company.

However, if an employee exceeds the limits on travel and subsistence expenses, they must pay these expenses out of their own pockets.

As an employer you are obliged to do sopay certain taxesand the National Insurance NI contribution to HMRC for staff travel expenses. This cost includes:

  • Travel expenses such as train tickets or plane tickets.
  • Reimbursement of travel expenses.
  • Accommodation costs, such as a hotel if the employer needs to stay overnight.
  • Food costs and other living expenses such as parking fees, tolls, tolls and business calls

Change in cost of living

From April 2019, HMRC no longer requires companies to provide receipts for every expense incurred during a business trip. the employee only has to prove that he is on a business trip at the time the costs are incurred. So if an employee eats three meals on a business trip, he must provide proof (receipt) for one of those meals.

However, please note:

  • This does not apply if you use specially agreed custom distribution keys
  • This also does not apply if you adhere to industry-agreed rates.
HMRC travel and accommodation costs: everything you need to know about it (1)

Non-refundable travel and accommodation expenses

There are certain costs and expenses that do not fall under the category of travel and accommodation costs, so you cannot declare these costs to your organization.

(Video) HMRC 24 month rule on travel and subsistence expenses

Undeclared costs are included

Daily travel expenses– the amount spent on the commute from the place of residence to the permanent place of employment, regardless of time and distance. However, if an employee has to travel an extra distance to work, the costs of that distance can be reimbursed.

passenger cars— if the employee has bought a private car on credit or throughallocation of capitalBoth amounts respectively do not fall under the reimbursement of travel and accommodation expenses and can therefore not be claimed.

According to HMRC, employees are entitled to tax-free travel expenses. The employee has both options; be paid tax-free by the employer or the employee may choosetax creditsabout any deficiencies in the tax return.

Reimbursable travel expenses

HMRC travel and accommodation costs: everything you need to know about it (2)

permitted mileage

HMRC has allowed the use of passenger cars on work-related journeys for a flat fee. These fixed amounts must first be approved by the organization and then the application can be processed. However, if the employee has made more than the agreed amount, he must pay the excess himself. However, if the employer does not pay the agreed and approved reimbursement, the employee can claim the full travel amount.

VAT on more kilometers:If your organization is registered for VAT and does not use flat-rate VAT accounting, you can reclaim the VAT on your fuel element via the kilometer allowance.#


temporary workplace

the employee can deduct costs incurred in the temporary employment agency. A temporary workplace is a place where the employee spends less than 40% of his working time or less than 2 years.

Permanent jobs

An employee cannot claim reimbursement of daily travel expenses from home to his permanent place of employment. But there are some exceptions like:

  • If you frequently travel from one place to another for business purposes, such as meeting clients, you may be able to claim travel expenses. The important thing to remember is that only these expenses are eligible for a claim if your commute differs from your regular commute.
  • If you have to travel urgently; if there is an emergency on-call service, the employee may be eligible for reimbursement of this emergency trip.

extensive travel

Traveling can be part of the job. In such cases, an employee who frequently travels from one place to another is entitled to reimbursement of expenses incurred during his travel. However, the employer must ensure that the place to which the employee travels does not fall into the category of a permanent location.

Hotel costs and surcharges

All expenses incurred by the employee for accommodation, meals and drinks, miscellaneous charges such as laundry etc. are taxable to HMRC. You are liable to HMRC for incorrectly billed expenses. Companies can let employees go over the limits, but will have to pay taxes every time.

Cost of living scale

HMRC has set standard rates for maintenance costs, known as 'living rates'. Employees, if they declare their expenses according to these rate scales, their payments will betax freeand social security contributions.

(Video) Travel and subsistence costs to reduce tax

Breakfast price

You can claim the price of the breakfast tax free up to £5. However, you can only claim this tax-free rate if you have had breakfast before 06:00 and have left your current accommodation before the usual time.

Meal rates:

  • you can be paid up to £5 for a meal if you are away from your place of residence and place of work for more than 5 hours.
  • Similarly, you can pay up to £10 for two meals if you are away from where you are and where you work for more than 10 hours.
  • If you leave your workplace after 8pm you may be charged up to £25 for lunch. M. or later than normal business hours.
HMRC travel and accommodation costs: everything you need to know about it (3)


The reference rates listed above are only eligible under the following conditions:

  • the trip must fit in the context of the employee's work or to a temporary workplace.
  • the employee must be absent from his normal place of work or home for more than 5 hours or 10 hours.
  • the costs of the meal (food and drink) should have been incurred by the employee after the start of the journey.

Travel and accommodation costs as an employer:

The employer is required to pay certain taxes and national insurance contributions on the allowances paid by the employer to employees for their travel and accommodation expenses. It covers travel costs, travel allowance, accommodation and public transport. In addition, living expenses such as meals, drinks and laundry costs. The employer must bear all these costs and report them accurately to HMRC.

If your employees use public transport, your costs include:

Seasonal entries

In case of direct transfer to employees:

As an employer If you have given your employee a season ticket, you must report the cost of the card to HMRC by submitting the cost on form P11D. the cost of the ticket must also be included in the employee's earnings, and the National Class 1 insurance must be deducted from the employee's payroll.

Reimbursement of subscriptions:

If your employees buy subscriptions themselves, you as an employer have more than one reimbursement option, e.g

(Video) Claim business travel expenses and save tax

  • you can cover the cost of tickets by giving the employee an additional allowance
  • You can increase the salary of the employee,

However, the cost of the subscription is recorded as wages, so the employee is responsible for paying class 1 taxes and insurance on the payroll.

Loan for season passes

If an employer gives an employee a carnet loan, it must be treated like any other ordinary loan, and therefore the employer must pay the national insurance and certain taxes. However, there are interest-free loans such as advantageous loans, etc.

Contribution to the provision of personnel facilities

As an employer, if you pay a certain amount to help your employees, you do not have to pass these amounts on to HMRC, nor do you have to pay tax or national insurance contributions. For example, if you help fund a bus route to reduce travel distances for your employees, you won't have to pay any kind of tax.


The complicated reimbursement process has made things difficult for both employers and employees. Those who are employed by an intermediary, such as an agency or sponsoring company, may spend a lot of time on business travel expenses trying to figure out how much living expenses are eligible (and which are not).

As such, it is important for small business owners and entrepreneurs to set up processes with specialist accountants so that they can file claims quickly if necessary. However, if you are looking for a specialist accountant,Clearing house countersWe have a team of experts and professional accountants with years of experience. The Clear House Accountants team handles all types of tax liabilities and national insurance contributions.

Jibran Qureshi

HMRC travel and accommodation costs: everything you need to know about it (5)

general manager

+44 (0)207 117 2639

(Video) What expenses can I include in my Self Assessment tax return?

author biography

Jibran Qureshi FCCA is the Managing Director of Clear House Accountants and has over 13 years of experience across a wide range of industries. Jibran's background includes a Masters in Financial Strategy withOxford universityin Executive MBA zHult International Business SchoolI His expertise in financial strategy, tax planning, operational consulting and performance reporting guides his knowledgeable approach to leading Clear House and its clients into the future. This ability placed him among the top 50 advisors in the Enterprise Nation.Recognizing the need for sustainable innovation disruption management early on, Jibran trained Clear House Accountants to be not only compliance professionals, but advisors who help build complex ecosystems around cloud accounting software, provide financial support, help manage of innovative tax systems, designing and implementing complex strategic plans and much more. than thiscustomers can thrive, not just survive.

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What is travel and accommodation expenses? ›

Definition. Expenditure on travel and accommodation costs of staff of the partner organisation that relate to delivery of the project. They cover travel costs (e.g. tickets, travel and car insurance, fuel, car mileage, toll, and parking fees), accommodation costs, costs of meals, visa costs, and/or daily allowances.

Can I claim accommodation costs? ›

In general, if you have to go to a temporary place of work for less than 24 months, you should be eligible to claim back travel expenses. What's more, as part of your travel expenses claim you can also claim tax relief on: Accommodation costs when you stay away from home. Subsistence for food and refreshment costs.

What is a reasonable travel expense? ›

What Are Reasonable Travel Expenses? Reasonable travel expenses, from the viewpoint of an employer or the IRS, would include transportation to and from the business destination, accommodation costs, and meal costs. Certainly, business supplies and equipment necessary to do the job away from home are reasonable.

What is the 24 month rule? ›

The 24 month rule has been in effect since 1998 and allows travel expenses to be claimed from your home to your client's site as long as it is classed as a “temporary workplace”. To qualify as a temporary workplace there are a few criteria: The engagement is for less than 24 months.

What is an example of accommodation in travel? ›

Hotels remain the classic of the tourist accommodation, offering both room and board (breakfast, half board and board). From single rooms to royal suites, the services provided by hotels also include room service, wellness areas, swimming pools, sports facilities, etc.

How do you calculate travel expenses? ›

as a general rule, figure $20/person per full day of travel. If traveling with teens or others with large appetites, increase that budget to $25/per person per day of travel to and from the destination. In the example above, a 250 mile trip (one way) which is 3.5 to 4.5 hours of travel is, at most, one meal.

How do I ask for travel expenses reimbursement? ›

Politely request the employer reimburses your travel expenses. For example: In order to attend my interview, I will need to travel from [your town, city or county] to [the town or city the interview will take place]. Please may I request [employer's name] reimburses me for my travel expenses?

Can I claim my lunch as a business expense UK? ›

How you can claim meals. In brief, if you can claim the cost of your food and drink, these expenses will be a business tax deduction. Therefore, you can include business lunch expenses and meal costs as part of your business travel expenses: Within your company expenses, if you run your own contractor limited company.

What are accommodations costs? ›

Accommodation costs means the expenses incurred by a hospital to provide its patients services for which a sep- arate charge is not customarily made.

How do I prove travel expenses for taxes? ›

The best way to prove business travel expenses (including hotels, flights, rental cars, meals, and entertainment) is to use a credit card slip (using your business card, of course) with additional notes on the business purpose. Make the note at the time you incur the expense.

What are 12 months rules? ›

Under the IRS 12-month rule, a taxpayer can deduct a prepaid expense in the current year if the rights or benefits for the taxpayer do not extend beyond the earlier of: 12 months after the right or benefit begins OR. The end of the tax year after the tax year in which payment is made.

What is the 24 month rule for HMRC? ›

The 24 month rule is a specific condition that lets you claim travel expenses for trips between your home and your client's offices or a “temporary workplace”. The idea behind it is that visiting a client's workspace - as opposed to your own HQ - requires special travel and can lead to undue costs.

What is considered a temporary place of work? ›

How does the IRS define a temporary work location? The IRS defines a temporary work location as a work location expected to last for less than a year. For example, an employee's or contractor's commute between their home and regular work location is not a deductible business expense.

What are the 4 types of accommodations? ›

Accommodations are typically grouped into four categories: presentation, response, setting, and timing and scheduling.

What are 3 examples of accommodation? ›

Examples of accommodations include:
  • sign language interpreters for students who are deaf;
  • computer text-to-speech computer-based systems for students with visual impairments or Dyslexia;
  • extended time for students with fine motor limitations, visual impairments, or learning disabilities;
May 24, 2022

What are the two 2 types of accommodation? ›

10 Types Of Accommodation According To Budget
  • Hotels. Hotels are the most common type of accommodation and easily accessible. ...
  • Apartments. This is one of the different type of accommodation having large areas and provides all the amenities like a hotel. ...
  • Hostel. ...
  • Guesthouse. ...
  • Bed and Breakfast. ...
  • Holiday Home. ...
  • Villas. ...
  • Private room.
Dec 4, 2020

What are two things that determine the cost of travelling? ›

There are a lot of factors that influence how much you will spend…which countries you visit, the types of accommodations you stay in, how often you move between cities, your mode of transportation, and how many tours and activities you do.

Are meals considered travel expenses? ›

You may deduct your meal expenses while traveling for business. For tax purposes, business travel occurs when you travel away from your tax home overnight for your business. You don't have to travel any set distance to get a travel expense deduction.

How do I manage my travel expenses? ›

Managing Expenses: Save Money #LikeaWizard
  1. Plan Ahead. ...
  2. Book airfare with stops or plane changes. ...
  3. Use an app that tracks your spending habits and helps you stick to your budget. ...
  4. Consider the year as a whole as you plan travel. ...
  5. Book two one-way tickets instead of round trip airfare. ...
  6. Pack an in-flight meal.

What is the difference between a travel allowance and a travel reimbursement? ›

A car allowance is a periodic stipend paid to an employee for the use of a vehicle and is usually taxable. A mileage reimbursement is a cents-per-mile rate multiplied by the employee's monthly mileage amount. If equal to or less than the IRS standard rate, a mileage reimbursement is non-taxable.

What does travel reimbursement cover? ›

A mileage reimbursement rate covers a wide range of vehicle expenses: gas, oil, tires, maintenance, insurance, depreciation, taxes, registration, and license fees. All these expenses vary from driver to driver. Without a "standard" employee expense profile, there can be no "standard" mileage reimbursement rate.

Do you have to claim travel reimbursement on taxes? ›

If a government employer reimburses an employee's mileage under an accountable plan substantiating the business mileage, and the reimbursement is at or below the Federal mileage rate, then: The reimbursement is not taxable to the employee. There is No income tax withheld.

Can I deduct my daily lunch as a business expense? ›

The good news is that business meals are 50 percent deductible. This means that every time you take out a client for dinner and drinks, you get to write off half of the bill. However, you can not go around deducting meals indiscriminately.

Can I claim groceries on my taxes? ›

If you require grocery items for business purposes, you can deduct the cost of groceries from your taxable income. According to the IRS, you can deduct any expense that is related to your profession as long as it is considered common and helps you in conducting your business.

Can I deduct business expenses without income? ›

You can either deduct or amortize start-up expenses once your business begins rather than filing business taxes with no income. If you were actively engaged in your trade or business but didn't receive income, then you should file and claim your expenses.

What is a simple example of accommodation? ›

Accommodation involves the modification of an existing schema to understand (accommodate) new information. It may involve creating a new schema altogether, for example, a child may have a schema for birds (feathers, flying, etc.) and then they see a plane, which also flies, but would not fit into their bird schema.

What is not a reasonable accommodation? ›

Reasonable accommodation does not include removing essential job functions, creating new jobs, and providing personal need items such as eye glasses and mobility aids. Nothing in the ADA prohibits employers from providing these types of accommodations; they simply are not required accommodations.

What is the difference between accommodation and accommodations? ›

Accommodation is commonly used in the plural form (accommodations) to refer to lodging—a place to stay, usually temporarily, as in hotel accommodations. Sometimes, accommodations means both food and lodging, as in This resort is all-inclusive, so all of our accommodations are included in the cost.

What are accommodation costs? ›

Accommodation costs means the costs on account of hotel accommodation as arranged by the Organiser.

What type of expense is travel? ›

A travel expense is a type of business expense. Therefore, you must be able to meet the general business expense requirements in order to claim a deduction. You can't deduct travel expenses to the extent that they are lavish or extravagant—the expenses must be reasonable considering the facts and circumstances.

What is accommodation in vacation? ›

Vacation rental or short-term properties are accommodations that travelers can rent on a short-term basis. These accommodations range from high-end luxury properties to spare bedrooms in other people's apartments and can include homes, condos, villas, apartments and even tents, yurts and boats.

What is the purpose of accommodation in travel? ›

With very few exceptions, tourists require a location where they can rest and revive during their travels, or a place to stay when arriving at a tourism destination. This means that accommodation is an essential support facility in destination regions.

What are examples of accommodation? ›

Examples of accommodations include:
  • sign language interpreters for students who are deaf;
  • computer text-to-speech computer-based systems for students with visual impairments or Dyslexia;
  • extended time for students with fine motor limitations, visual impairments, or learning disabilities;
May 24, 2022

What is accommodation included? ›

: lodging, food, and services or traveling space and related services. usually used in plural.

What is accommodation in simple terms? ›

Accommodation is all about making room — it can mean a room or place where you will stay or an agreement about sharing something.

Who should pay for travel expenses? ›

Employers generally pay for your travel expenses when you are traveling as part of your job. They may be covered at the time of the expense by providing an allowance, an employee credit card, or a prepaid card. However, some businesses may have you pay the expenses and then reimburse you.

Is travel a billable expense? ›

Travel expenses

Getting on an airplane to fly to a client's office is a billable expense. Add the cost of the trip to your invoice and include airfare, hotel, and Rent-a-Car, but not drinks at the bar.

What are the major types of accommodation? ›

There are five common types of accommodations: hotels, motels, flats, bed & breakfasts, boutiques, and lodges.

What are the three types of vacation? ›

Here is a guide of different types of vacation you can have;
  • Staycation. Do you feel that you need a break but don't have enough coins to pay for a vacation? ...
  • Sports Vacation. ...
  • Volunteer Vacation. ...
  • Beach Vacation. ...
  • Cruise Vacation. ...
  • Camping vacation. ...
  • Road Trip Vacation. ...
  • Sightseeing Type of Vacation.
May 17, 2021

What is the best accommodation when you travel? ›

  • Hostels. Best for: Solo Travellers + Budget Travellers. ...
  • Hotels. Best for: Luxury travel + Weekend Breaks. ...
  • Apartments. Best for: Long-term travel + families + groups. ...
  • Apart'hotels. Best for: An easier and more luxurious apartment experience. ...
  • Guesthouses. Best for: Budget travellers and unique experiences.

What are the three main purposes of travel? ›

There are three main reasons for travel. These are: o Leisure tourism o Visiting friends and relatives o Business tourism Most tourist trips can be placed into one of these groups. Many leisure tourism trips are taken where the main purpose is relaxation, rest and enjoyment.

How does accommodation work? ›

During accommodation, the ciliary muscle contracts and moves the ciliary body anteriorly and deep towards the optic axis. All the muscles work simultaneously and tension on the zonular ligaments is relaxed. When the lens releases tension it increases its biconvexity and this enables focusing on closer objects easier.

What are the benefits of accommodation? ›

Such benefits include:
  • Retaining valuable employees,
  • Improving productivity and morale,
  • Reducing workers' compensation and training costs, and.
  • Improving company diversity.
May 4, 2023


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2. Self Employed Expenses Tips: Travel and Subsistence
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3. How to Claim Tax Refunds for Employment Expenses
4. Claiming Business Travel Expenses on International Trips: What You Need to Know
5. 12 Self Assessment expenses you didn’t know you could claim
(1st Formations)
6. FAQs- Travel & Subsistence Expenses
(Icon Accounting)


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