Claiming travel expenses: the journeys your company can pay for

Tax law puts your travel into two piles. A journey to a permanent workplace is ordinary commuting, and if the company pays for it the cost lands on your P11D and in your personal tax. A journey to a temporary workplace, or between two places of work on the same day, is business travel and the company can pay for it in full.

Everything turns on which description fits the place you drove to. A director who works from one office most weeks has a permanent workplace there, whatever the contract says about it. A director who spends six weeks at a client’s premises and then moves on has a temporary one.

There is a rule people miss on the days in between. If you travel from home to a meeting, or from a meeting straight home, and that trip is really a variation on your normal run to the office, only the excess over your usual commute is claimable. Driving past your own office on the way somewhere does not turn the whole journey into business travel.

HMRC sets all of this out in booklet 480, its guide for directors and employees. Chapter 8 deals with travel and subsistence and is worth half an hour of anyone’s evening.

This is where good claims quietly turn into bad ones. A workplace stops counting as temporary once you have spent, or expect to spend, more than 24 months working there and that site takes up more than 40 per cent of your working time. The moment that matters is when the expectation changes, not when the two years actually run out.

So a project that was always going to last eighteen months, then gets extended to three years, kills the travel claim from the date the extension is agreed. Carrying on claiming from that point is the sort of thing that reads badly when someone reviews the file later.

I have seen a tribunal case where the whole claim came apart on a related point. Someone had been travelling from home to a hotel near a site a long way away and treating the lot as business travel. HMRC disallowed most of it, decided the behaviour was careless, and added a penalty on top of the tax. The tax alone would have been survivable. The penalty was the part that stung.

If you run a construction company with long contracts, or a consultancy where one client has slowly become most of your week, this is the first thing I would check.

For most directors, using your own car and reimbursing yourself mileage beats putting a car through the company. A company car brings a benefit in kind that follows the list price and the emissions, and on a typical petrol or diesel car the personal tax usually outweighs the corporation tax relief. Electric vehicles are the exception worth modelling properly.

Mileage works on HMRC’s approved rates. Cars and vans use a two tier structure, a higher rate for the first 10,000 business miles in the tax year and a lower rate after that, and the 10,000 is counted per person for the year rather than per trip. Motorcycles and bicycles have a single rate with no tier. There is also a small supplement per mile for carrying a colleague on the same business journey.

Pay yourself at or below the approved rate and there is nothing to report. Pay above it and the excess becomes taxable pay with employer National Insurance attached.

One practical warning. The car rate moved during 2026-27 after years of sitting still, so check the current figure on gov.uk before you set your policy. Bookkeeping software often carries forward whatever rate someone typed in years ago.

Once a journey qualifies as business travel, the costs that come with it usually qualify too. Train fares, parking, tolls, a hotel for the night and a reasonable meal while you are away are all fair game for the company to pay.

Reasonable is doing some work in that sentence. A meal on the road is subsistence. Taking a client out for dinner is entertaining, and entertaining is not deductible against corporation tax even though the company can still pay for it. The two get muddled constantly, and the fix is a bookkeeping habit rather than a tax argument: code them separately at the point they happen, with a note of who was there.

Mixing business with a few days away is the other common grey area. If the trip would have happened anyway for business reasons, the business portion stands and the private portion comes out. If the business element was bolted on to justify the flights, the whole thing is at risk.

If you also work from home between site visits, the home office position interacts with all of this. We have written separately on using your home as an office, and the two claims are easier to defend when they tell the same story.

A travel claim lives or dies on what you can produce eighteen months later. For mileage, that means the date, where you went from and to, the business reason, and the miles. An app that logs it as you drive is worth more than an afternoon of reconstructing journeys from your calendar in January.

For everything else, keep the receipt and the reason attached to it. Hubdoc and Dext do this well and we set clients up on one or the other, because a photographed receipt with a note takes ten seconds and a missing one takes an hour of argument.

Pay the costs through the company where you can, or reimburse yourself properly through the director’s loan account. Putting business travel on a personal card and never claiming it leaves your own money sitting in the company for no reason. Running private travel through the business card and leaving it uncoded does the opposite.

None of this is complicated. It is just one of those areas where the work has to happen monthly, and where most of what we find at year end could have been fixed in real time.