Travel costs are an allowable expense as long as they are for the following:
- Travelling that must be undertaken to perform your duties.
- Not journeys which, are ordinary commuting or private travel.
Travel between home and a temporary workplace is an allowable expense. A temporary workplace is one where you go to perform a task of limited duration or for a temporary purpose.
The rules regarding temporary workplaces are based on how long you are to be based at one site or expect to be based at the site. In most cases a temporary workplace is one where you do not, and do not expect to be at the site for more than 24 months.
If you are new to contracting and have just signed your first contract for 12 months then you can claim the travel costs. When this contract nears the end, the client offers to extend it for another 12 months. At this point you EXPECT to be there for 24 months in total and must stop claiming travel costs right away. If instead you asked for an 11 month contract extension you would only expect to be there for 23 months in total so could continue to claim your travel expenses.
There are some special circumstances that may affect any claims:
1. If you incorporate a Ltd Company, work at a single client, then close your company down.
2. If you work at a number of sites but all in a certain location i.e. London Docklands.
3. If you work at more than one site on the same contract.
The cost of lunch can be claimed when you are working at a temporary workplace.
The subsistence must be a pre-packed sandwich or a small meal at a cafe, the cost would not be allowable if you were to simply reimburse yourself for the ingredients to prepare your own packed lunch.
Meals at restaurants would be classed as business entertainment and not tax deductible.
If you are staying overnight on business away from home at a temporary workplace, you may also claim for the provision of breakfast, an evening meal and a flat rate subsistence allowance of £5 per night (£10 per night if working overseas) to cover small personal expenses such as laundry, newspapers etc – you do not have to have receipts for the overnight flat rate but you must have receipts for all subsistence expenses.
This information is for general information only. We take no responsibility for any action taken or refrained from in consequence of its contents. Always seek our professional advice specific to your circumstances before acting.