Travel expenses

Produced by Tolley in association with Philip Rutherford

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.

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 necessary attendance’

In addition to satisfying one of these tests, the employee must be ‘obliged to incur and pay them as the holder of the employment’ under ITEPA 2003, ss 337(1)(a), 338(1)(a). The test is common to both provisions. Commentary and examples on both elements of this test, that it be ‘incurred and paid’ and ‘obliged as holder of the employment’, can be found in the Business expenses ― general rule guidance note.

HMRC guidance is at EIM32350 onwards.

More about ‘in the performance of duties’ and ‘necessary attendance’

The employee should have incurred the travel costs either because it was part of his duties to

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