Understanding travel expenses

LHP Accountants
Jun 26
3 min read

Often we have clients ask us, what is classed as tax allowable for travel?

When employees are required to travel for work, understanding which travel expenses can be claimed is crucial for both employers and employees. Differentiating between temporary and permanent workplaces ensures that travel costs are claimed appropriately and in compliance with tax regulations.

Travelling from home to the regular workplace are not deductible for tax purposes, a workplace is defined in tax legislation to mean a place at which the employees’ attendance is necessary to perform the duties of the employment and is not a temporary workplace.

“Temporary workplace”, in relation to an employment, means a place which the employee attends in the performance of the duties of the employment, the cost of travel to a temporary workplace can be claimed as business mileage, qualifying for tax relief.

A temporary workplace is a location that is different from the regular workplace and where employees visit temporarily or for a limited duration, even if they attend it regularly.

An example is:

If you normally work in Tenby but your employer requires you to work in an office in Carmarthen, then the office in Carmarthen would be a temporary workplace. However, the workplace will not be temporary if you attend it for a period of continuous work lasting more than 24 months.

The strict test for a deduction is that the travel must be dictated by the duties of the employment.

An example:

An employee works for a retail shop that has stores across the Southwest Wales.

She lives in Tenby and works at the store in Cross Hands. She has a number of business phone calls to make that can be made at any time during the day. Her employer asks her to stop off at the Carmarthen store on the way to her permanent workplace in Cross Hands in order to make some of the phone calls. No deduction is due for the cost of her travel from Tenby to Carmarthen. Her ordinary commuting journey does not become a business journey because she stops off at the Carmarthen office. The Carmarthen branch is not a workplace on this occasion because her visit is not an objective requirement of the duties of her employment. Similarly, she is not entitled to relief for the cost of her journey from Carmarthen to Cross Hands. Carmarthen is not a workplace on this occasion and so the travel to her permanent workplace in Cross Hands is ordinary commuting.