NOT financial advice - seek advice from a professional for your specific situation

    TaxKilnUK tax guidance
    TaxKilnUK tax guidance

    Travel & Subsistence Allowances

    HMRC's **BENCHMARK SCALE RATES for travel + subsistence allowances** (no receipts required from 6 April 2019) allow employers to reimburse staff for business travel meal + incidental costs without detailed expense receipting. **Rates 2025/26**: £5 (5+ hours absence, one meal); £10 (10+ hours, two meals); £25 (15+ hours ongoing at 8pm, late evening); £6 breakfast (departure before 6am); £25 UK overnight incidental expenses. Reimbursement at benchmark rates is tax + NI free for both employer + employee provided the employee is on a QUALIFYING BUSINESS JOURNEY (which requires supporting evidence, diary, itinerary, business purpose documentation). **Alternative**: ACTUAL EXPENSE reimbursement with receipts + qualifying journey evidence is also permissible (fully tax/NI free). Or PAYE Settlement Agreement (PSA) for minor items. **DIRECTOR PERMANENT-WORKPLACE TRAP**: a director's Ltd Co REGISTERED OFFICE or home office is typically their 'permanent workplace'. Travel from home to any location that is NOT A TEMPORARY WORKPLACE is ORDINARY COMMUTING + NOT qualifying travel for subsistence purposes. HMRC applies a **24-MONTH RULE**: attendance expected to exceed 24 months at a location makes it a permanent workplace.

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    Guidance, not advice. We explain the rules, we don't assess your situation. Always seek financial or tax advice from your accountant, or contact HMRC. Read our editorial scope →

    What this relief is, in plain English

    HMRC benchmark scale rates simplify business-travel reimbursement substantially, no receipt collection for ordinary meal + incidental costs provided the employee is on a qualifying business journey. The rates haven't changed meaningfully in years + cover real-world costs adequately for typical UK business travel. Key constraint for Ltd Co directors: the permanent-workplace trap. A director's Ltd Co registered office or home office is typically their permanent workplace; travel from there to any other regular location with >24-month expected attendance is commuting (not claimable). For directors with genuinely varied client-site travel patterns, most journeys qualify. For directors with one major client they visit regularly for extended periods, that client site can become a 'permanent workplace' even though it's not their own office, making travel there non-claimable. Mechanics for owner-directors: maintain travel logs documenting date + destination + business purpose + duration for each journey. Reimburse from Ltd Co at benchmark rates (no receipts needed) OR at actual cost (with receipts). Both routes tax + NI free for qualifying journeys. Above-benchmark reimbursement = excess potentially taxable + may need PSA treatment. Combined with AMAP (private vehicle mileage at 55p/mile from April 2026) + Trivial Benefits (£300 director annual cap) + Mobile Phone Exemption, travel + subsistence is a standard component of owner-director extraction strategy.

    How it works

    HMRC benchmark scale rates

    £5 (5+ hrs, one meal); £10 (10+ hrs, two meals); £25 (15+ hrs ongoing 8pm late evening); £6 breakfast (depart pre-6am); £25 UK overnight incidental. No receipts required from 6 April 2019 if reimbursement at-or-below benchmark + qualifying journey.

    Qualifying business journey requirement

    Travel must be incidental to business purpose (client visit, meeting, training, supplier site, etc.). Document each journey with date, destination, purpose, duration. Ordinary commuting excluded. Samadian principle: home-to-regular-business-premises is commuting.

    24-month permanent workplace test

    Attendance expected to exceed 24 months at any location makes it a PERMANENT WORKPLACE, travel there becomes commuting (not claimable). Strictly enforced. Long-term consultancy assignments often trigger this rule.

    Alternative routes, actual expenses or PSA

    Above-benchmark reimbursement: collect receipts + reimburse actual cost (tax/NI free if qualifying journey). Or PSA (PAYE Settlement Agreement), employer settles BIK + NI on minor items collectively, simplifying admin.

    Who qualifies

    Interactions with other reliefs

    AMAP (Approved Mileage Allowance)

    AMAP for VEHICLE mileage (55p/25p); Travel & Subsistence for MEAL + INCIDENTAL costs on business journeys. Both apply concurrently on a single business trip.

    Trivial Benefits (£50/£300 director cap)

    Travel-related items not covered by T&S rates (e.g. small gifts to clients, occasional small client lunches outside the directly-traveled scope) potentially via Trivial Benefits within £150 director annual cap.

    Annual Events Exemption

    Annual events (Christmas party) different from business travel. Stack independently, staff Christmas dinner is annual event (£150/head); a working meeting over dinner is business subsistence.

    Mobile Phone Exemption

    Mobile phone for general communications; T&S for in-person travel. Stack independently for owner-director extraction package.

    Common mistakes + audit triggers

    Worked example

    Aaron, Bristol - Sole-director Ltd Co consultancy with varied client travel + benchmark rate reimbursement (2025/26)

    Aaron's Bristol consultancy involves regular travel to clients in London, Manchester, Birmingham. 2025/26: ~80 client visits, typically day trips (10-15 hours away from home including travel). Plus 6 overnight stays for multi-day client engagements + 2 training conferences (3-day events).

    Calculation: **Subsistence reimbursement calculation:** 80 day trips at ~12 hours each → £10 benchmark per day × 80 = £800. 6 overnight stays: £25 subsistence × 6 + £25 incidental × 6 = £300. 2 training conferences (3 days each = 6 overnight stays): £25 × 6 + £25 × 6 = £300. **Total annual subsistence reimbursement: £1,400 (all tax + NI free for Aaron + Ltd Co).** **Plus AMAP for vehicle business mileage:** Assuming 12,000 business miles 2025/26 (rising to 55p first 10k miles from April 2026): 2025/26 (45p/25p rate): 10k × 45p + 2k × 25p = £4,500 + £500 = £5,000. 2026/27 (55p/25p rate): 10k × 55p + 2k × 25p = £5,500 + £500 = £6,000. **Plus actual hotel costs reimbursed separately:** 6 overnight stays + 6 conference nights = 12 hotel nights × £120/night avg = £1,440. **Total annual T&S reimbursement: £1,400 (subsistence) + £5,000 (AMAP) + £1,440 (hotel) = £7,840 in 2025/26.** All tax + NI free for Aaron + Ltd Co (qualifying journeys + benchmark / actual rates). Company books £7,840 as deductible business expense → CT relief 25% × £7,840 = £1,960. **Net company cost: £5,880.** **Vs paying personally from dividend extraction:** Net £7,840 needed → gross dividend £11,832 → company cost ~£15,776 (after CT on profits funding dividend). **Saving via T&S + AMAP route: £9,896/year** vs personal-funding of same travel costs. **Documentation**: - Travel diary: date, destination, client/purpose, business meeting confirmation. - Hotel receipts kept for actual-cost reimbursement. - AMAP mileage log: date, start, end, business purpose, miles per journey. - Six-year retention for HMRC enquiry.

    Statute reference: Income Tax (Earnings and Pensions) Act 2003 + Finance Act 2019 (benchmark rates) ITEPA 2003 ss.336-339. HMRC manual: EIM30001 onwards (subsistence + travel).

    Frequently asked questions

    What happens if I miss the Self Assessment deadline?+
    The Self Assessment deadline is 31 January (online filing) for the previous tax year. Miss it and HMRC apply an automatic £100 penalty. Beyond that: £10 per day from 3 months late (capped at £900), 5% of tax due at 6 months late, and another 5% at 12 months late, under Schedule 55 of the Taxes Management Act 1970. If you have a genuine reason (serious illness, bereavement, technical issue with HMRC's systems) you can appeal with evidence; HMRC accepts reasonable excuse appeals in most genuine cases.
    Do I need an accountant or can I file Self Assessment myself?+
    Legally you can file Self Assessment yourself via gov.uk for free, most simple sole-trader returns (single income source, basic expenses) are realistic to self-file. An accountant adds real value when: your trading profit is above £40,000 (extraction-strategy decisions matter), you have multiple income streams (PAYE + self-employment + property + dividends), you've crossed the £90,000 VAT threshold, you're considering incorporation, or you have an HMRC enquiry. Expect to pay £400-£1,500/year for a typical sole-trader accountant; the cost is itself a deductible expense.
    How do payments on account work?+
    When your Self Assessment tax bill exceeds £1,000 for the first time, HMRC requires payments on account toward NEXT year's tax. Half the current bill is due 31 January (alongside the current bill); the other half is due 31 July. So your first January after crossing the threshold can hit with a double-bill: last year's balance + first payment on account. Adjust via Form SA303 if you expect next year's income to drop substantially. Payments on account don't apply if more than 80% of your tax is collected via PAYE.
    I'm a sole director working from home + travel to clients, what's my qualifying journey position?+
    Travel to GENUINE TEMPORARY WORKPLACES (client sites, supplier visits, business meetings at non-permanent locations) IS qualifying business travel. Travel to a REGULAR/PERMANENT workplace (your home office if that's where you regularly work, OR a client site where you attend regularly with expectation of >24 months continued attendance) is ORDINARY COMMUTING, not claimable. **Document carefully**: for each business trip, record date, destination, business purpose, expected duration. The 24-month rule applies to ANY location attended regularly + with expectation of continued attendance, typically catches long-term consultancy assignments at one client + extended secondment-style arrangements. For genuinely varied client-site travel (different sites, no single regular pattern), most journeys qualify for travel + subsistence allowance treatment.
    Can my Ltd Co reimburse me at benchmark rates without receipts?+
    Yes, that's the post-April 2019 simplification. HMRC's benchmark scale rates can be used WITHOUT RECEIPTS provided: (1) employee is on a QUALIFYING BUSINESS JOURNEY (documented purpose + destination); (2) reimbursement is AT OR BELOW the benchmark rates; (3) reasonable systems to check claims are made. Above-benchmark reimbursement (e.g. £30 for a 12-hour absence vs the £10 benchmark) requires evidence of actual spend + may need PSA (PAYE Settlement Agreement) treatment for the excess. For ordinary business travel, benchmark rates are usually sufficient to cover real-world meal + incidental costs without admin burden of collecting receipts.
    What counts as a 'business journey' for subsistence purposes?+
    Travel where the journey is incidental to the business purpose (visiting client, attending meeting, training, supplier site). Specifically EXCLUDED: ordinary commuting (home to permanent workplace); private travel during business trip (e.g. social activities); travel that's substantially private with incidental business element. The Samadian UKUT 0013 (TCC) principle continues to apply: home-to-regular-business-premises journeys are ordinary commuting even where home is also a place of business. For Ltd Co directors with home offices + occasional external meetings: home-to-meeting + return = qualifying business travel + subsistence if applicable. Document each business journey with date + destination + purpose to support claim under HMRC enquiry.
    What's the £25 overnight incidental expenses for?+
    £25/night UK overnight incidental expenses covers SMALL ADDITIONAL costs incurred during business overnight stays, newspaper, drink with meal, phone calls home, laundry, taxis, tips. Available WITHOUT receipts at the benchmark rate. Stacks with hotel accommodation cost (separately reimbursed at actual cost with receipt) + the standard subsistence £25 for 15+ hour absence. So a typical overnight business trip: hotel cost (£100 actual) + £25 subsistence (15+ hours) + £25 incidental = ~£150 daily reimbursement, all tax + NI free for the employee. For longer trips (multiple consecutive nights), reimbursement scales accordingly. Above-benchmark reimbursement requires actual receipts + may trigger PSA treatment.

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