The pandemic has changed a few things but one of the key changes has been that more of us are now working from home. The question that is now being asked is what can you claim for business travel? Travelling expenses when you are working from home is something most employees seek to claim back either from their employer or HM Revenue & Customs (HMRC).
The overarching principle
If you remember when you are normally travelling from home to the office, then you are not entitled to reclaim it back as business travel. But if you are travelling from the office and going on a business trip then you are entitled to claim it back. But these days it is common to find the “office” is the same as the home.
HMRC has always accepted that there are occasions when the employee’s home is the main workplace for the purposes of tax. In their own employment manual (guidance for best practice), it refers to the following example:
“An employee is employed to train animals for the disabled. It is essential these animals are familiar with a normal domestic environment and so most of the training takes place in his home.”
In this case the employee’s home is the workplace. When the employee therefore goes travelling to other workplaces for meetings a claim can be made for the travel expenses to be reimbursed free of tax and national insurance.
HMRC goes on to say the only reason the deduction is due, though, is because there is a requirement for this employee to work from home as the animals need a domestic premises.
What’s changed since Covid for employee travel
Since the pandemic working from home has become more of a normal feature even if it not essential nor a requirement of a job.
The only time you could previously claim for the cost of travelling between home and another venue was if it was a requirement of your job to work from home as in the above example.
HMRC guidance has not moved with the same speed as the desire in most of the working population to at least work some days at home.
We can apply the same principal if you are going to for example visit a client or picking up stock. Let’s say this occurs on a day you are working from home. That day your home is your temporary place of work. Any travel therefore between home and another site for business is an allowable expense.
What can you reclaim for business travel?
After the pandemic for many people working from home is part of daily reality.
HMRC has a mileage allowance that you can pay your employees for genuine business travel, these are referred to as Approved Mileage Allowance Payment (AMAP’s). These are paid to those employees using their own car.
Full rates can be found here
There is a lack of clarity when it comes to Electric Cars and AMAP. If you are buying an electric car there are many tax advantages for doing so especially if you are going to be using it for business.
HMRC has since 2018 had a pence per mile claim back for Company Cars but nothing specific for Electric Cars owned personally by employees.
Essentially if an employee is using their own car for business travel, the mileage rate for a fully electric car is the same as for diesel or petrol.
What is also interesting is the AMAP’s haven’t changed since 2012 and there is no talk of amending these given the current fuel prices.
So, there is an allowance of 45 pence per mile for the first 10,000 miles no matter what type of fuel you use and 25 pence per mile thereafter. If you pay more than these rates to your employee it would be considered benefit in kind for P11d.
If you are in need of any in depth tax advice relating to the above topic or any other matter just get in touch.