Self Employed Tax Deductions: Travel and Subsistence

Cottons Chartered Accountants and Antelope Digital Marketing and PR explain the confusing world of tax deductions for those that work on a self-employed basis.

One of the most troublesome areas for expense claims relates to what self-employed individuals can claim as travel and subsistence.

The key rule is that you can only claim a deduction for expenses that have been wholly, exclusively and necessarily for your business.

The Basics

You can claim back:

• Travel outside your normal commute
• Overnight accommodation on work journeys
• Dinner and Breakfast when staying overnight
• Food and drink during journeys outside your normal pattern of work

You cannot claim back:

• Your day to day commute to and from your base of work
• Food and drink on journeys as part of your daily commute
• Penalties and fines including parking and speeding tickets
• Any travel costs not related to work

Travel Expenses

Knowing your base of work is key to understand your daily commute and travel expenses. If you rent a working space or work from home, then either will be your base of work. If you don’t rent a space or are generally working in different locations e.g. a plumber, then your base may also be your home. This is particularly true if you are claiming use of your home as an office as part of your expenses.

You cannot include any expenses for any journey between your home and base of work as this is considered part of your daily commute. Any travel outside of your day to day commute can be an expense proving it is wholly and exclusively for work purposes.

Travel expenses can include airfares, rail journeys, taxis, buses, congestion charges, toll fares and mileage/petrol costs. Penalties and fines including speeding or parking tickets cannot be claimed, as well as the use of Oyster cards if you use the card for personal travel.

Meals

The tax office does not accept day to day meals as a business expense. Moreover, if the travel is part of your normal work pattern then you cannot claim back any meals e.g. a plumber cannot claim back meals as being out and about in different locations is there normal pattern of work.

If the journey is one-off or not part of the normal work pattern, then you can include meal expenses.

Overnight Stays and Accommodation

If it is required that you stay overnight for business purposes, then you can claim the cost of accommodation and reasonable expenses including breakfast and an evening meal. HMRC also explains that costs should be reasonable, for example, alcohol is not subsistence unless it is purchased with a meal and should be realistic at one drink to half a bottle of wine.

It is also worth noting that any accommodation claimed for that is within close proximity to your base of work may not be considered to be subsistence.

Thank you to Cottons Chartered Accountants and Antelope Digital Marketing and PR for writing this blog.

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