Travel

4 mins

Our experts at DSR Tax Refunds know how hard it is to find good, quality information about HMRC’s tax regulations that is easy to understand, and that’s why we have created these handy guides to tell you everything you need to know. Our aim is to make life easier for our clients and that is why we want to share our expertise with you. You can also call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.
What do HMRC include as travel expenses?
If you pick up the tab for any of your employees’ travel costs, you might have to report these expenses to HMRC and as a result could end up paying additional National Insurance and tax.
HMRC considers travel costs to include:

When HMRC refer to subsistence, they mean all those costs which are a necessary part of travelling such as phone calls, parking costs, congestion charges or road tolls.
If the expenses relate to the use of public transport then they are treated in a different way – see our guide ‘Public transport’ for information on those reporting rules.
Are there any exemptions?
If the cost relates to any of the following then it is considered to be exempt and doesn’t need to be reported to HMRC or paid on:

If the travel costs form part of a salary sacrifice arrangement, it needs to be reported to HMRC whether or not it is covered by the above exemptions.
How to you report these expenses to HMRC and pay on them?
If the travel costs aren’t covered by an exemption, you need to report it to HMRC and as a result, there may be additional National Insurance or tax to be paid on it. What you need to pay and how you report it depends on the nature of the travel and how it is arranged and paid for.
Business travel
If the business travel costs are covered by an exemption, you won’t need to report these costs to HMRC nor will you need to include them in your end-of-year reporting. If they aren’t covered by an exemption, you will need to report them on your P11D form but there will be no additional tax or National Insurance to deduct. However, if you reimburse more than the necessary costs of the business travel, HMRC will consider this to be additional earnings so it will need to be added to the employee’s other earnings and deduct and pay PAYE tax and Class 1 National Insurance as you would for their other earnings. If you have agreed a scale rate payment with HMRC relating to these costs, they won’t need to be reported to HMRC.
Private travel
Any travel that is not for business purposes will be considered to be private travel by HMRC. This includes the employee’s commute between their home and a permanent place of work. How it is reported to HMRC and paid on depends on how it was arranged and paid for.

Salary Sacrifice Arrangements
If the value of the transport and any associated subsistence form part of a salary sacrifice arrangement, and the amount of salary given up is more than the value of the expenses, you need to report the salary amount to HMRC instead. This only applies to salary sacrifice arrangements made after 6th April 2017.
How can DSR Tax Refunds help?
We aim to make life as simple as possible for our clients and that includes giving you the information you need to make your taxes (and your life) simpler and less stressful.  Our team of experts at DSR Tax Refunds are always on hand to help our clients and our excellent standing with HMRC means that we can make sure you don’t fall foul of their regulations, while claiming your maximum tax relief. We can even take care of all that paperwork and deal with HMRC on your behalf too. Call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.
This page was last updated on 07/11/2018.

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