Even when a business trip seems simple, travel expenses can prove tricky. Can your employees claim travel expenses for meals taken on their trip? What about their overnight stay? Their travel to another office?
Can your staff claim for their travel expenses if they have a travel card? And what about if they travel with a spouse or relative? To answer all of these questions, it's important to define what qualifies as a travel expense, and what doesn't.
So What Qualifies as a Travel Expense?
A few definitions turn up when we think about travel expenses. Here are the most common:
- Home-to-work travel. The commute from home to the office, and back home. As long as your office is not a 'permanent workplace', this expense is permissible.
- Travel from your workplace. This is any type of trip to visit a customer, client, or supplier outside the main workplace. This type of travel is permissible and you must pay it.
- Permanent/temporary workplace. Whether your employee can claim travel costs depends on the type of workplace. A 'permanent workplace' is a site that your employee attends to work on a regular basis.
A temporary workplace is a location that your staff attend for a limited amount of time. If your employees attend the site for more than 24 months of continuous employment, the workplace becomes permanent. HMRC classifies permanence as 40% or more of the individual's working time. You must pay staff travel to and from a temporary workplace.
What are Reasonable Business Trip Expenses?
Aside from travel expenses, your employees can claim for meals and accommodation. We call these expenses 'subsistence'. You can reimburse employee expenses for the food they buy during their journey to or from a temporary workplace, but there is no legal requirement to do so. This same rule also applies while they're at the temporary workplace, and includes any food expenses during overnight stays. Other subsistence includes:
- Parking charges
- Vehicle hire
- Congestion charges
- Business phone calls
Exceptions to Subsistence
Work travel expenses only extend to items or services that are essential to and bought during the commute. For example, if your employer buys a sandwich at a service station, it's a valid expense. However, if they make the sandwich at home, prior to the journey, this is not an expense. This is true even if they eat the sandwich during their commute. If an employee owns a travel card, their travel expenses aren't reclaimable unless they go over their card allowance. You only need to pay expenses for someone else travelling with your staff if the person's presence is essential.