Employment Tax

Travel expenses

Produced by Tolley in association with Philip Rutherford
  • 05 May 2022 06:52

The following Employment Tax guidance note Produced by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:

  • Travel expenses
  • Introduction
  • Travel expenses
  • More about ‘in the performance of duties’ and ‘necessary attendance’
  • When are travel expenses not allowable?
  • Ordinary commuting
  • The key concepts
  • Permanent workplace
  • Temporary workplace
  • Permanent or temporary workplace ― considerations
  • More...

Travel expenses


Travel expenses have specific tests which must be satisfied in order for an employee to gain a deduction. These rules are different from the general rule for deductibility of expenses in that they do not need to be incurred ‘wholly and exclusively’. This is because with any business travel, there are likely to be elements of mixed or private purpose, eg meals taken on a trip or overnight accommodation because the employee needs sleep. Meals and overnight accommodation come under the heading ‘subsistence’ and expenses on subsistence follow the rules on business travel. See the Subsistence expenses guidance note for more information.

As a result of the exemption for expenses that are either business expenses or the reimbursement of HMRC approved amounts, it is incumbent on an employer to keep the necessary processes, systems and controls to ensure that business and non-business expenses can be correctly identified and recorded.

The NIC legislation on deductible travel expenses is generally aligned with the tax treatment. Therefore, unless indicated otherwise, NIC treatment of expenses will match the tax treatment.

Note that allowable travel and subsistence payments are not included when calculating pay for the national minimum wage (NMW) or national living wage (NLW). For more information on the NMW / NLW, see the National minimum wage ― overview guidance note.

Travel expenses

In order for a travel expense to be allowable, it must satisfy one of two tests, either:

  1. it is ‘necessarily incurred in the performance of duties’

  2. the travel is ‘for

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