Travel and subsistence are two of the more troublesome and confusing expense claims facing sole traders. This blog is going to help take some of that mystery away and give a brief overview of what can and cannot be included, and under what circumstances these expenses are tax deductible.
As with most things concerning tax, the overriding rule is that you can only claim for any expenses that are wholly and exclusively for business. But what does this mean in practice?
Business Travel
Before you can claim any business travel expenses, you must think about the reason behind the journey. Only business travel can be claimed, meaning certain criteria must be satisfied in order for travel to be allowed.
Below is a table showing some examples of deductible and non deductible expenses.
| Deductible | Non Deductible |
| Travel, other than the commute, to or from your normal workplace | Normal commute to and from normal workplace |
| Travel between workplaces | Parking fines, speeding tickets and other related penalties |
| Overnight accommodation on work journeys | Travel costs that are not solely business related – e.g. purchase of a travelcard that is also used for non work-related journeys. |
As we can see, business travel expenses do not include travel between your home and your usual place of work as this is considered to be normal commuting. Travelling between practices would be classed as a business travel expense however. For example, say you work in two different practices on the same day, A and B. Travel from your home to practice A is not allowable, travel from A to B is, but travel from B back home is not.
Additionally, travelling to and from courses or business meetings is allowable provided they were solely for business.
Business Motor Expenses
There are two choices on how to claim business motor expenses:
- Proportion of actual car costs each year based on your business mileage. This may include fuel, maintenance, servicing, repairs etc.
- Claim a flat rate per business mile. These are the current flat rate allowances:
| Vehicle | Flat rate per mile with simplified expenses |
| Cars and goods vehicles first 10,000 miles | 45p |
| Cars and goods vehicles after 10,000 miles | 25p |
| Motorcycles | 25p |
For most, claiming the flat rate will be much easier than working out the business proportion of their motor expenses.
Other Business Travel Cost
Other travel costs that can be claimed are:
- Parking fees
- Motorway tolls
- Congestion charges
- Any bus or train fares that relate to travel for business purposes
Hotels and Subsistence
The Caillebotte v Quinn (1975) tax case set the precedent that subsistence during the day is not tax deductible on the basis that as everyone must eat and drink to live, the expense incurred isn’t wholly and solely for business purposes. This means that lunches, for example, will always be disallowed if they are eaten during part of your normal working routine. Lunches that fall outside of this, for example on a course, are allowable.
When a business trip involves one or more nights away from home, the hotel accommodation and overnight subsistence, up to a reasonable cost, are tax deductible.
Hopefully this helps clear up what can and cannot be claimed for tax purposes in relation to travel and subsistence, but if you need any further help get in touch.
