When travel & subsistence qualifies for tax relief
The term ‘travel expenses’ includes the actual costs of travel together with any subsistence expenditure and other associated costs that are incurred in making the journey.
Travel in the performance of the employee’s duties
- Tax relief is available only where travel is in the actual performance of the duties or where it’s necessary.
Employee who is resident in the UK carrying out all their duties abroad is entitled to tax relief
- When they start the job abroad – for the full cost of travelling from anywhere in the UK to the place abroad where they’ll be working.
- When they finish the job abroad – for the full cost of travelling back to anywhere in the UK.
- While they’re working abroad – for the cost of accommodation and subsistence but only to the extent that this cost is included in the employee’s earnings, for example, where the cost is borne or reimbursed by, or on behalf of, their employer.
Employee who is resident in the UK and carries out part of their duties abroad is entitled to tax relief if the duties
- Can only be carried out abroad – for the full cost of all journeys from anywhere in the UK to the place where the employee is working and return journeys to the UK.
- Keep the employee abroad for 60 days or more – for the full cost of a spouse or civil partner and children travelling from anywhere in the UK to visit or accompany the employee to the place where they are working, and their return journey back to the UK.
Tax relief is available only to the extent that an expense has been actually incurred.
What includes in subsistence:
- Any necessary subsistence costs incurred during the journey.
- The cost of meals necessarily purchased whilst an employee is at a temporary workplace.
- The cost of the accommodation and any necessary meals where an overnight stay is needed – this will be the case even where the employee stays away for some time.
What are allowed for subsistence
Tax relief is only allowed for subsistence costs which are attributable to the business travel, such as costs incurred in the course of the journey which are additional to any costs that the employee would ordinarily incur if they were not travelling on business.
You can reimburse subsistence to employees by making a scale rate payment.
If you choose not to use the scale rate payment you can either you may apply for a bespoke rate from HMRC and include the payments in a P11D form.
Pay or reimburse your employees actual vouched expenses.
Extra costs of foreign travel
- Inoculations needed for that journey.
- Visas needed for that journey.
- An employee who goes abroad to work can also get tax relief for medical treatment provided abroad, or insurance against the cost of medical treatment provided abroad, where these expenses are borne or reimbursed by, or on behalf of, their employer.