Can I claim tax relief on my travel expenses?

August 4, 2022

Can I claim tax relief on my travel expenses?

As a business owner, you know that is under your business responsibility to pay the HMRC-approved mileage costs to your employees happen to utilise their personal cars/bikes for corporate travels. 

HMRC’s nomenclature of the term 'business mileage' thus implied that you can claim a reduction on tax, for this purpose. How and when can you avail this benefit?

Mileage Fundings

Employees are liable to get a 'mileage allowance' if they make use of their private cars/bikes for corporate journeys. Moreover, this could also be free from any taxation and NI, provided that the calculated summation is not larger than the AMR's which are approved by HMRC.

Facts for Consideration

  • When an employee receives a mileage allowance which is of a lesser amount than the AMR, then he/she can claim an extra relief on tax.
  • An instance when the summation of mileage allowance accounting for AMR is more than the amount which the worker recieves from its employer; the employee can claim an additional tax relief, further.
  • However, this happens where the commencing or ending point of a corporate travel is not a workers regular workplace, for example, their house. 

An additional deduction on taxation is liable when the mileage that occurs on a corporate journey is larger than that of the worker's regular travel route, and when they have not been given a due AMR reimbursement to cover up for  the additional miles they have had to travel, for corporate purposes.

Legitimate Corporate Travels

In order to be liable for an AMR compensation, the journey has to be mandatory to the need of an employee doing the requirements of their job. However, if there occurs a destination which does not have relevance to the job (in the route travelled by the employee), then it cannot be deemed as being a journey that qualifies for AMR. This can be found in HMRC’s Guidance Notice 490.

 

Nevertheless, if a corporate journey commences or ends (or both) at the residence of the employee, and the mileage overcome is larger than that for which the worker gets a mileage compensation from their hirer, then they are eligible to demand a reduction on taxation (at HMRC’s verified rates) for the cost incurred.

Employees may be liable to claim a tax deduction only if their mileage increases the allowance which you provide them with, as an employer.

Business Trips Coming Up?

Do you have planned business trips?

Contact us to find out if you are qualified for a tax deduction.