What travel expenses can I claim?
If you are an employee and you pay for travel expenses that are related to your job, but these are not reimbursed by your employer, you might be able to get tax relief. This is a complex area but we cover the main points below.
It is crucial to understand that the rules on what travel expenses qualify for tax relief are quite strict. In particular, there is generally no tax relief available for the costs of 'ordinary commuting' – that is, travel between an employee’s home and a permanent workplace (more on this below). If you are not a taxpayer, you cannot get tax relief.
Below we consider the tax position for different types of travel expenses you might incur in relation to your job. For information on the specific rules around travel expenses incurred by agency workers and those employed by employment intermediaries such as ‘umbrella companies’, see our dedicated page Am I employed, self-employed, both, or neither?.
Note: There is no requirement in law for an employer to reimburse an employee’s travel expenses, although many do, as a matter of good practice. Whether or not they do so, will depend on what has been agreed between you – for example as per the employment contract.
What are the basic rules?
Travel expenses are only allowable for tax purposes if:
- You have to make the journeys in the performance of the duties of your employment (this may apply where the duties themselves inherently involve travelling such as a delivery driver or meter reader); or
- They are journeys which you make to or from a place you have to attend in the performance of your duties, which can include trips from your office or other work location to visit a customer or other ‘temporary’ workplace. This rule can also include travel directly from your home to visit a customer or to another ‘temporary’ workplace. (Note, the word ‘temporary’ has a specific meaning in tax law, which is not the same as the ordinary, natural meaning of the word – it typically applies when you are required to do any work in another location for a temporary purpose, as part of your ‘core’ employment.)
You can find out more about the travel rules and about how HMRC apply them to different scenarios in HMRC’s booklet 490. (Please note that even though this booklet is referred to as an employer booklet, it is useful for employees too.)
What are permanent and temporary workplaces?
It is important to understand these two terms as travel expenses between an employee’s home and permanent workplace will not be allowable, while travel expenses between an employee’s home and temporary workplace may be (as per the second bullet point above).
Most workers will have no difficulty in identifying their permanent workplace: it is the place where they regularly go to work. It may be a factory, office, shop or somewhere else – but it is the place where the employer expects the worker to be. You might have more than one permanent workplace if you have two jobs for example, or if your employer requires you to work in one location for two days a week and in another location for three days a week on an ongoing basis.
A temporary workplace is somewhere you would attend irregularly or for a limited period of time. For example, if you normally worked in Birmingham, but your employer required you to work from a store in Leicester for a year, then that store in Leicester would be a temporary workplace.
However, a workplace will not be “temporary” if you attend it for a period of continuous work lasting more than 24 months. A period of continuous work is a period over which the duties of the employment are performed to a significant extent at that workplace. HMRC consider the duties to be performed to a significant extent if the employee spends 40% or more of their time at that place.
So where an employee spends less than 40% of their time at a temporary workplace, they do not need to consider the 24 month rule.
The examples in chapters 2 and 3 of booklet 490 may be helpful to explain this further.
You can read more about permanent and temporary workplaces in HMRC's EIM manual on GOV.UK.
I’m home based. What travel expenses can I claim?
The rules are very complex, but guidance around tax relief for home workers is contained in booklet 490 – see chapter 3.
My working arrangements have changed due to coronavirus. What travel expenses can I claim?
You can get guidance from the news article we published.
How do I know what ordinary commuting costs are?
Ordinary commuting is travel between your home and a permanent workplace. Costs of ordinary commuting are not allowable for tax purposes. Ordinary commuting also includes travelling to other places that are not significantly different to ordinary commuting. This means that if an employee, for instance, is required to attend a temporary workplace and the journey to the workplace is substantially the same as that to the usual place of work (and at a similar expense), no tax relief will be allowed.
There are no ‘hard and fast’ rules here, but HMRC say that they would not argue that travel is just ordinary commuting ‘where the extra distance involved is 10 miles or more each way.’ That comment by HMRC is their interpretation of the law, rather than the law itself, but it does give you some idea of how they might view a particular situation.
You can read more about ordinary commuting in HMRC’s EIM manual on GOV.UK.
Sometimes employers may want to pay or reimburse your costs of ordinary commuting for a time – for example, where the employer has relocated and made the journey to work longer or more expensive.
As such journeys are not ‘allowable’ your employer cannot reimburse them on a tax and NIC free basis (or any associated accommodation or subsistence). They will be treated like ordinary employment income and there will be no tax relief. As such, some employers may protect their employees from the tax liability in these instances – for example, by covering the tax liability for them.
I am a site-based worker. Are the rules different for me?
Site-based employees are employees without any fixed workplace whatsoever. For example, an IT service desk support, integrated for a time within a client’s office building and working at a succession of sites. They are allowed tax relief for the related travelling, accommodation and subsistence expenses provided work at that site doesn’t last longer than 24 months.
You may not be a site-based employee, if it is reasonable to assume that the period of work at the site will comprise 'all or almost all' of the period for which you work for that employer.
I am employed in the construction industry. Are the rules different for me?
There may be different rules for you if you are site-based – for example, if you are employed in the construction industry and you are assigned to work at a particular site for a length of time governed by your employer’s contract there. Normally you would work at that site exclusively for that time and rarely visit the offices of your employer. Provided you are expected to work at that site for less than 24 months, and your employment contract spans more than one such site-based contract, your travelling expenses to and from home may be eligible for tax relief.
Sometimes, you may be asked to work away from home on a long construction project (with subsistence and accommodation provided). If you are expected to spend more than 24 months there from the outset, then the workplace is considered your permanent workplace and any travel costs (including any associated subsistence or accommodation) to get there are considered ordinary commuting.
Note that where employees are working on a number of sites for an employer they may be regarded as working at one single site if they are near to each other. This may be important when considering the 24 month limit.
Also note that where employees are office-based and make visits to sites (rather than actually being based at the site), the office to site travel will qualify for tax relief but the home to office travel probably will not.
I travel around from place to place. Can I get tax relief?
If you are an ‘itinerant’ worker (that is one where travelling forms an inherent part of your duties, such as a delivery driver or meter reader as explained above), normally you would be able to claim tax relief for all your costs of travelling – even those from home to work. The position is explained further in HMRC’s EIM manual on GOV.UK.
One exception to this would be if you were an area-based employee, in other words one whose employment duties are specifically defined by reference to an area. Even if you have to attend different places in the area in the course of your job, the area could be regarded as a permanent workplace and travel costs to and from your home and inside the boundary of that area would not be allowable.
I have more than one job. Can I claim the costs of travelling between them?
No, the costs of this travel would be considered to be ordinary commuting.
My travel qualifies for tax relief. What exactly can I get tax relief on?
If your travel qualifies for tax relief, then assuming your employer does not pay or reimburse the expenses, you should be able to claim a tax deduction for your travel expenses (for example, train or bus fares). If you use your own transport for such journeys there is the statutory system of tax-free approved mileage allowances for business journeys. If an employer pays less than these amounts, you can claim tax relief for the unused balance of the approved amount (this is known as the Mileage Allowance Relief (MAR) system).
Travel expenses can also include subsistence (food and drink) and accommodation (where there is an overnight stay). You can read more about such tax relief on our page What if I use my own car for business purposes?.
Where can I find further information?
In HMRC’s booklet 490 you will find information on how HMRC apply the travel rules to specific situations, such as journeys to a depot where tasks are allocated, where the employee’s job is based at home or where the employee attends the same workplace for most of the time they hold the employment.
You can read more about employment expenses generally, including the interactions that exist between unreimbursed expenses and the minimum wage and benefits on our page What if I incur expenses in relation to my job?.
If you think you are entitled to claim tax relief, we have a web page which explains how to claim it.