Employee travel expenses

There is no requirement to report certain travel and subsistence expenses where an exemption applies. The travel and subsistence benefits that do not need to be reported include reimbursed costs to employees covering business travel. Subsistence includes meals and any other necessary costs of travelling, for example parking charges, tolls, congestion charges or business phone calls.

As an alternative to reimbursing employees for actual costs incurred, HMRC’s benchmark scale rates or an approved bespoke scale rate may be used. If an employer is looking to use a bespoke scale rate, this must be agreed with HMRC in advance. Where a scale rate arrangement is in place there are no specific reporting requirements.

Employers that reimburse employees with more than the necessary costs of business travel must treat the excess as earnings. The additional amount should be added to the employee’s other earnings, and PAYE and Class 1 National Insurance will be due.

There is usually no tax relief for private travel between a permanent workplace and an employees’ home. Accounting for any tax due on private travel depends on who arranged the transport and who paid for it.

There are exemptions for certain types of travel, including a works bus service, certain disability-related travel, taxis after occasional and irregular late-night working, bicycles and cycle safety equipment and travel due to public transport disruption from industrial action.