Travel expenses

By Tolley in association with Philip Rutherford

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

  • Travel expenses
  • Introduction
  • Travel expenses
  • When are travel expenses not allowable?
  • The key concepts
  • What travel expenses are allowable?
  • Travel expenses which may or may not be allowable
  • Travel expenses which are not allowable
  • Level of reimbursement
  • Travel expenses of workers supplied through intermediaries
  • Salary sacrifice
  • Recent reviews of travel and subsistence expenses

This document discusses these in detail, together with the situations in which travel expenses may or may not be deductible; issues with excessive reimbursements by an employer; travel expenses of workers supplied through intermediaries; and salary sacrifice arrangements.



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.

ITEPA 2003, ss 337–339

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.

ITEPA 2003, s 289A
Travel expenses

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

  • it is ‘necessarily incurred in the performance of duties’ (ITEPA 2003, s 337)
  • the travel is ‘for necessary attendance’ (ITEPA 2003, s 338)

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.

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