HMRC have now completed their review on acceptable claims of travel expenses. The results are as follows:-
Employed (paying tax under PAYE)
An employed person with permanent workplace may be asked to travel to a temporary workplace to carry out their duties. The travel expenses are tax deductible in the following scenarios:
• The worker works at the temporary workplace for less than 40% of his normal working time
• The temporary workplace is for a period of up to two years or until notified that the temporary workplace will be the workplace for more than two years.
Self-employed (paying tax under Self-Assessment)
Regular or predictable journeys are not tax allowable – i.e. a carpenter travelling to a workshop each morning, a shopkeeper travelling to a shop each morning, or accountant travelling to the office each morning.
Any travel from the workplace is of course tax deductible – i.e travelling to the bank, customers or suppliers.
If the self-employed person works from an home office any travel from the workplace would be tax deductible- i.e. travelling to the bank, customers or suppliers.
Personal Company – IR35 Rules Applying
From 5 April 2016 travel costs are not deductible for travelling to the customer if that is where the contractor receives “supervision & control”.
Personal or Private Company
Directors and other employees are paid under PAYE so the rules above apply to them.
Travel expenses for all employees to travel to business meetings or training facilities are tax deductible.