What You Need to Know: Business Travel Expenses


03 January 2021

Traveling for work is often seen as a perk of the job, but claiming expenses for business travel can be complicated.

Whether you're an employee claiming for a business trip in the UK or internationally, or you're an employer that needs to know your options for reimbursing travel expenses, you've found the right place - we've outlined the key rules below.

So buckle in, let's get started.

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What are business travel expenses?

Business travel expenses are expenses accumulated on business journeys, including mileage, meals and overnight accommodation (known as subsistence), parking fees, and toll road charges.

(FYI, speeding fines and parking tickets aren’t included.)

HMRC say that business travel only covers the following two types of journey:

  • journeys forming part of an employee's employment duties (such as journeys between appointments by a service engineer or to external meetings)

  • journeys related to an employee's attendance at a temporary workplace

So, if you have to visit specific locations to fulfill your job, excluding commuting to your usual place of work, this is business travel.

If your business travel includes an overnight stay then the costs incurred for this can be claimed. You can also claim for subsistence costs incurred during business travel, for example, a meal at the airport.

Business travel is normally free from tax

Legitimate business expenses are not subject to tax or National Insurance costs. So, as long as it meets all of the requirements, business travel is normally free from tax.


Claiming food and drink expenses

Meals and drinks can be claimed for if consumed on work journeys outside of your normal commute. These can be reimbursed at the actual cost or the benchmark scale rates set by HMRC.

These rates are the maximum tax-free allowances that can be paid by employers for food and drink costs, and are calculated based on the number of hours that you are away from your normal place of work.

The rates are:

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Some qualifying conditions must be met for these rates to be used. These conditions are:

  • the travel must be in the performance of an employee’s duties or to a temporary place of work

  • the employee should be absent from their normal place of work or home for a continuous period in excess of 5 hours or 10 hours

  • the employee should have incurred a cost on a meal (food and drink) after starting the journey


Overnight incidental expenses

If you stay away overnight while travelling on business, you are entitled to tax-free reimbursement for your personal incidental expenses. 

This covers items like private telephone calls, laundry and newspapers. The amounts are £5 per night if staying in the UK, or £10 per night if staying overseas. 


Things to note if you’re an employee

Similarly to mileage claims, if you incur expenses as a result of work, and these expenses are not reimbursed by your employer, you may be able to claim tax relief from HMRC

There are a few conditions that must be met:

  • You personally pay for a necessary work cost

  • This cost is only necessary for work

  • Your employer doesn’t pay you back

  • Your employer doesn’t offer you a suitable alternative

(Plus, you must be a taxpayer as this is a tax break. 😀)


Things to note if you’re an employer

Unless classed as an ‘exemption’, you must deduct and pay tax and National Insurance on all expenses and benefits you give to your employees, and report them to HMRC as normal.

Business travel is included as an ‘exemption’, alongside phone bills, business entertainment, uniform, or tools for work. To qualify for an exemption, you must either be reimbursing your employee's exact costs or paying the benchmark rate. You don't need to apply for an exemption unless you want to pay bespoke rates to your employees.

  • Important: If you choose to reimburse your employees’actual costs, the amount reimbursed will only be tax-free up to the amount allowed by HMRC. If you reimburse employees at higher rates, these would become earnings and therefore are subject to tax and National Insurance. 


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International travel expenses

 If your employees’ go wild and spend a small fortune on accommodation and meals, and claim the expenses back as business expenses, you have two options:

  • you can reimburse them to the exact cost

  • you can reimburse them according to the HMRC scale rate payments.

Reimbursing international travel costs using HMRC rates

The benefit of using HMRC’s scale rate payments is that it saves you time, and makes your expense process more straightforward.

Using the scale rate means you do not have to check every single expense receipt (although you should still check a sample) and if your employees travel often, you can set a budget for food and accommodation for all trips rather than for each trip.

HMRC has published a very long list of countries, with applicable scale rates and currencies. See the full list of countries here:


If you are unable to find the country visited in the list, then you would use the rates applicable to the city that is geographically closest.

Example: Reimbursing your employee's business travel using scale rates

Your employee, Ana, is away on a business trip to Berlin. She checks into a hotel in the city on Monday at 3pm, and leaves on Thursday morning after breakfast, on the 9am flight. 

You wish to reimburse her according to the HMRC overseas scale rates, which will cover the cost of her meals, accommodation and transport to the office.

For the 48 hours between Monday 3pm to Wednesday 3pm:

2 x €72 (24 hour rate)

= €144

For the 18 hours between Wednesday 3pm to Thursday 9am:

1 x €167.50 (room rate for Wednesday night)

1 x €65.50 (10 hour rate for 3pm Weds to 9am Thurs)

= €233

Total reimbursement for Ana's trip:

= €377

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 How does Expend help?

There is another way to handle business travel claims. Reimbursing your employees often involves a lengthy process with forms or spreadsheets, bank statements and paper receipts. Plus your employees are out-of-pocket for their travel expenses, until they are reimbursed.

Expend is an all-in-one expense management platform that works on any device for any expense type, payment method, currency and business. Plus, for employees who regularly incur expenses, having an Expend card means they never have to wait around to get reimbursed again.

Each smart Mastercard enables you to set spending limits per employee on a daily, weekly or monthly basis and block spending at certain retailer types, such as pubs and bars.

Restricting ATM withdrawals or online transactions and instant card locking gives you peace of mind - leaving no room for misuse.

Through the Expend app, your employees can easily submit any expense from any payment type while on-the-go - attaching receipts, notes and assigning expenses to a client or job number within seconds, enabling them to keep on top of their expenses on a daily basis.

Once an expense is uploaded, a manager can either approve or deny it. This allows you to see what your workforce is claiming and to flag any inconsistencies or problems as soon as they’re spotted.

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Disclaimer: This is not legal, accounting, or tax advice - it's simply a guide. If you need help, check with your accountant or contact HMRC directly


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