HMRC Travel Expenses: 2025 Guidelines for UK Business Travel

Business travel is an exciting part of any job as it presents opportunities to discover new cities, make valuable connections, and seize career-changing prospects. Unarguably, the best part of it all is that you can enjoy the experience and return the majority of the money spent during the journey.

However, handling expenses post-trip is proven to be a hassle for many employees. After all, dealing with expense registration and knowing which costs can be deducted and which can’t is a highly confusing process, especially when it comes to HMRC regulations. 

In this blog, we will help you understand the core of HMRC travel expenses and provide you with a guide on deductible costs. We will also tell you about some of the best practices and tools for travel expense management that will keep business travel fun. 

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Key Takeaways

• HMRC mileage rates guide tax relief on business travel – Employees using personal vehicles can claim 45p per mile for the first 10,000 miles and 25p thereafter. For company cars, advisory fuel rates vary by engine size and fuel type, ranging from 10p to 26p per mile.
  
  
• The 40% and 24-month rules define temporary workplaces – If an employee works at a location less than 40% of the time or for under 24 months, it may qualify as a temporary workplace, allowing travel expenses to be claimed.

  
  

• Best practices reduce errors in travel expense reporting – Clear guidelines, accurate receipts, fraud detection systems, and organized records help businesses stay compliant and avoid penalties when claiming HMRC travel expenses.
  
  
• Automated tools like Klippa SpendControl boost efficiency – Digital platforms streamline receipt scanning, mileage tracking, and approval workflows, saving time and ensuring HMRC compliance through accurate, real-time reporting.

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What are travel expenses?

Travel expenses are the costs incurred during a business trip or any work-related travel away from the standard work location. Travel expenses might include transportation, accommodation, meals, and other costs related to business travel. 

HMRC (His Majesty’s Revenue and Customs) travel expenses refer to the costs incurred for business-related travel that you can claim back on your tax return. Understanding the HMRC travel expense regulations is important for several reasons:

• Pay less taxes: Claiming allowable travel expenses can lower your taxable profits and decrease Corporation Tax. Essentially, a lower taxable profit results in lower taxes.
• Save costs: Your company can effectively manage and reduce its overall operational costs by claiming travel expenses back.
• Ensure compliance: Correctly reporting and claiming travel expenses ensures HMRC compliance and allows companies to avoid penalties. 
• Be on top of your financial records: Accurate recording and claiming of travel expenses contribute to the validity of your company’s financial records and a full overview of your financial health.

As we established the meaning and importance of HMRC travel expenses it is crucial to realize which of your travel costs qualify for tax return.     

Which travel expenses are deductible?

When it comes to deducting travel expenses, there are many rules to follow. Fortunately, HMRC has provided clear guidelines on which costs can be reimbursed and the requirements for a trip to qualify as “business travel.”

Shortly, travel expenses can be deducted if they are obtained while traveling to and from a temporary work location during the current tax year or the 4 years preceding it. Hence, you’re not eligible for tax relief on travel expenses made from your home to your standard work location and vice versa. 

According to the HMRC, you can submit the following travel expenses incurred during your business trip:

• Public transport costs
• Overnight accommodation
• Meals 
• Congestion charges and tolls
• Parking fees
• Business phone calls and printing costs
• Business mileage*

* When traveling to a temporary work location, you can claim tax relief on business mileage using cars, motorcycles or bicycles. The claimed amount will depend on the approved mileage rate and whether you use your own or a company vehicle.

See the HMRC 2025 travel rates for employee-owned vehicles here: 

Vehicle Used	First 10,000 business miles	Each mile over 10,000 miles
Car and Vans	45 pence	25 pence
Motorcycles	24 pence	24 pence
Bicycles	20 pence	20 pence

The advisory rates for company vehicles are the following:

Engine size	Petrol — amount per mile	LPG — amount per mile
1400cc or less	14 pence	10 pence
1401cc to 2000cc	16 pence	12 pence
Over 2000cc	26 pence	18 pence

Engine size	Diesel — amount per mile
1600cc or less	13 pence
1601cc to 2000cc	15 pence
Over 2000cc	20 pence

Notably, to claim the cost of an overseas trip, you must provide evidence that the travel was necessary to perform employee duties. Trips that didn’t include client meetings or contractual arrangements and were initiated solely for educational or networking purposes cannot be claimed as a deduction.

Now you can see that claiming tax relief for some travel costs can be quite tricky. Properly managing travel expenses requires knowledge of HMRC regulations and a streamlined documentation process. In our next blog section, we’ll explore effective techniques for handling these costs.

The 40% Rule: Travel Expenses & Temporary Workplaces

When claiming tax relief on travel expenses, HMRC uses the 40% rule to determine whether a workplace is considered temporary. If an employee works at a location less than 40% of their time, it’s likely considered temporary, and travel costs may be eligible for tax relief.

However, once time spent at that site reaches 40% or more, it’s generally viewed as a permanent workplace, and travel expenses can no longer be claimed.

There’s no specific time limit tied to the 40% rule, but HMRC may still scrutinize regular patterns of work. For example, attending a second location consistently, even under 40%, could lead to it being treated as a permanent workplace.

This rule often works in tandem with the 24-month rule, which states that once an employee knows they’ll be at a site for more than 24 months, it becomes a permanent workplace for tax purposes, regardless of how often they attend.

Best practices for travel expense management

Travel expense management can be overwhelming, especially if your business revolves around international clientele. At some point, dealing with never-ending expense claims can prove to be a tedious and time-consuming task that uses up important resources.  

Here are some of the best practices that will help you track all your travel expenses in an efficient and timely manner: 

Establish clear communication

Inform your employees of the expense reimbursement procedure. Answer to what information is required, who is responsible for processing it and when it should be submitted. Provide a guidebook or integrate a dedicated platform that streamlines the submission process. 

Set submission criteria

Accept and process reimbursement requests that contain all crucial data. Analyze expense claims that include a copy of the transaction and align with the current or previous four tax years, allowing you to claim tax relief successfully. 

Regularly update and organize data

Keep your travel records up-to-date and separate them from other employee expenses for HMRC reporting purposes. Use folders or digital filters to analyze a year’s worth of data effectively. 

Eliminate expense fraud

Invest in fraud detection systems. Avoid errors and fraudulent reimbursements that can harm your company’s financial health and put you at risk of penalties for submitting illegitimate receipts for tax relief. 

Automate your expense management

Take advantage of travel management tools to streamline your expense management and save time on repetitive manual tasks.

Manage travel expenses with SpendControl

Forget about the manual receipt processing with Klippa SpendControl! Our intuitive app auto-scans and uploads expense data to your system. Authorized personnel can immediately review and approve transactions. Once finalized, booking expenses with our accounting and ERP integrations is possible with just one click!

Eliminate the need for manual data entry, ensure compliance with HMRC regulations, and prevent fraud within one dedicated platform. Increase employee satisfaction and get better financial insights while saving valuable time and reducing the need for manual labor.  

Klippa SpendControl provides some of the key features for upgrading your expense management: 

• Manage your vendor invoices, employee expenses, and corporate credit cards in one platform
• Scan, submit, process, and approve receipts via web or mobile app
• Achieve 99% receipt data extraction accuracy with Klippa’s OCR
• Track business mileage via our Google Maps integration
• Regain control over your expenses with intuitive dashboards
• Customize your approval management with multi-level authorization flows 
• Never fail to comply with tax and data privacy regulations with our ISO27001-certified and GDPR-compliant solution
• Rely on automatic multi-currency support for international payments
• Prevent fraud with built-in duplicate and fraud detection
• Integrate SpendControl with your accounting and ERP software, like QuickBooks, NetSuite, or SAP

Are you ready to upgrade your travel expense management? Trust our platform to simplify your expense approval process and achieve optimal results. Book a free demo to see our award-winning solution in action, or contact our SpendControl specialists for more information. 

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