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Within the realm of UK employment taxes, the rules on what constitutes “business travel” can be quite complex and an area that in our experience is often misunderstood or simply ignored!  The rules are relatively straight forward where employees have a permanent base/office, in terms of the expenses they can or cannot claim tax free.  The complexities tend to arise where employees do not have a permanent base/office.

Whilst HMRC has recently issued some further tax guidance on employees increasingly working on a hybrid arrangement (especially since the pandemic), the rules on business travel have not been changed for quite some years now, which brings some further complexities!  This article provides an overview and hopefully some clarity on some of the areas that ought to be considered.

“Business travel” – the basics

“Business travel” is the term used to describe travel that has been incurred “wholly, necessarily and exclusively” in the performance of the employee’s duties of employment, the cost of which is tax deductible for employees. “Business travel” does not include “ordinary commuting”, which broadly, in this context is defined as travel between the employee’s home and a permanent workplace.

“Permanent” vs “temporary” workplaces

HMRC draws a clear distinction between a “permanent” and “temporary” workplace, with tax relief only available on travel to a “temporary” place of work.

A “temporary workplace” is broadly defined as somewhere an employee attends, in order to perform a task of “limited duration” or for “temporary purpose”. Generally, a workplace will be “temporary” if either of the following apply:

  • The employee works at the location for less than 24 months (excludes employees who are employed on a fixed-term contract at a permanent workplace), or
  • Broadly, the employee spends less than 40% of their working time at that place of work over a period (although if there is a regular pattern of attendance at a particular location, which is less than the 40% e.g., same day each week for a prolonged period) the location may not be considered a “temporary workplace”.

It is worth noting that whilst this article refers mainly to travel expenses, the same rules will generally apply to other related expenses such as subsistence, accommodation, etc.

The different categories of employee

  • Office and depot-based employees – with the office or depot being the “normal place of work” / “permanent workplace”, travel from home to the office/depot is “ordinary commuting”, but expenses incurred on travel between different offices/depots, or from that location to a client, would be eligible for tax relief.
  • Geographically-based employees – these are employees with no fixed office, where instead their duties are confined to a particular geographical area, which is deemed to be their “permanent workplace” becomes more intricate. Certain conditions must be satisfied for the employee to be considered geographically based (e.g., their employment duties are defined to that area and they attend that area regularly). In such cases, all business travel within the area and the occasional business travel outside the outside the area would qualify for tax relief. However, if the employee lives outside the area, the travel between their home and the edge of the area will be “ordinary commuting” and not qualify for tax relief.
  • Home-based employees – the meaning of “business travel” can be slightly different for employees who work from home on a voluntary basis. For those on hybrid contracts who are still required to come into the office on a regular basis, it is very likely that their home-to-office travel will still be regarded as “ordinary commuting”. However, for those on a permanent/formal “homeworking” contract there may be the opportunity to claim tax relief on travel expenses they incur on the rare occasion that they do need to be in the office.

Reimbursement of employee “business travel”

So now we know what “business travel” is, what are the tax implications for employers and employees when “business travel” expenses are reimbursed? If employees incur costs whilst they are conducting “business travel” then they are entitled to have these reimbursed by their employer, in full, with no tax implications. It is treated as tax-exempt earnings.

However, a common mistake that is made is where an employer reimburses an employee for “non-business travel” where the employee uses their own car. This payment will be treated as normal employment income and so it will be subject to income tax and national insurance through the payroll (for both the employee and employer).

Reimbursement where an employee uses a company car

If an employee uses a company car only for “business travel”, they can be compensated for the mileage by their employer tax-free and there will be no benefit in kind. If, however, the company car is also made available for private use, this could trigger a company car benefit in kind charge for the employee. The charge is based on the cars’ list price and its CO2 emission, reportable on the P11D.  Secondly, if the employer covers the cost of private travel/fuel (including ordinary commuting), which is not ‘made good’ by the employee, the employee could be subject to an additional “private fuel” benefit in kind charge. This charge is based on a “multiplier” amount (£27,800 for 2024/25) and the cars’ CO2 emission percentage, which is an “all or nothing” charge.


Navigating the UK tax implications of “business travel” often requires an experienced understanding of the rules governing this area. Employers and Employees need to understand/adhere to these rules and keep accurate records to minimise any unwanted tax liabilities, but as this article outlines, that can be easier said than done.

If you would like to know more, please contact Minesh Trivedi who is a Partner and Head of our Employment Taxes service line, either via email ( or by telephone (07961 616944).


We hope that you find this briefing note helpful. However please note that it has been prepared for awareness purposes only and, as such, represents only a high-level and simplified summary of the rules. It does not constitute advice and is not a substitute for taking formal advice tailored to your specific circumstances.

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