As the world has become more connected and technology has advanced, working remotely from the comfort of your own home is commonplace. But what many remote workers may not realise is that they are entitled to tax relief on travel expenses related to their line of work.
If that comes as news to you, you could be missing out on significant savings.
This blog aims to provide information and guidance on tax relief benefits available to remote workers for travel expenses, as well as advice on how to claim this tax back.
Eligibility Criteria for Tax Relief on Travel Expenses
To qualify for tax relief on travel expenses, individuals and businesses must meet specific eligibility criteria.
The travel must be directly related to your line of work, and the expenses must not have been reimbursed by your employer. You also need to be able to demonstrate that you are travelling for business purposes and not personal reasons.
Plus, the expenses must be reasonable and necessary. In other words, the costs incurred must be reasonable to the nature of the business and the distance travelled.
Types of Travel Expenses Eligible for Tax Relief
There are various travel expenses that are eligible for tax relief, such as mileage, accommodation, meals and parking costs. It is important to note that allowable expenses will differ depending on whether you are employed or self-employed. For remote workers, the most common expenses are likely to be mileage, train or bus fares, and even flights – particularly for those who travel frequently.
It’s worth noting that the expenses incurred during business travel outside the UK may also be eligible for tax relief as long as your trip is solely for business purposes. Because of this, it is essential to keep records of all your expenses, such as receipts and travel tickets, so that they can be claimed back at a later date.
Claiming Tax Relief on Travel Expenses
Remote workers can claim tax relief on their travel expenses by either claiming the expenses back through their tax return or by claiming the expenses directly from their employer.
The most common method is through your tax return, which involves filling out a claim form and providing receipts for all expenses claimed. However, if you are not registered for Self Assessment, expenses below £2,500 can be claimed online or through your tax code.
Be warned, though, claiming tax relief on travel expenses can be a complex process, particularly for those who are self-employed or own their businesses. For that reason, it’s always a good idea to seek the advice of a qualified accountant or tax expert, such as IN Accountancy. We can provide expert guidance on how to navigate the process and ensure that all eligible expenses are claimed back correctly.
Different Tax Relief Options Available for Travel Expenses
There are several different tax relief options available for travel expenses, including claiming back the cost of fuel or other expenses related to the use of a personal vehicle, claiming for parking fees, and claiming for public transport costs. However, you do need to be aware that the amount of tax relief that can be claimed varies depending on your circumstances and the nature of your work.
For example, if you use your own car or van for business journeys, it is worth remembering that we have a statutory system of tax-free approved mileage allowances in this country. Therefore, if you are reimbursed at a lower rate than those statutory amounts, you are well within your rights to claim tax relief for the unused balance. This is officially known as the Mileage Allowance Relief (MAR) system.
Other permissible travel expenses may include food and drink (known as ‘subsistence’) and hotel accommodation if you have had to stay overnight for business purposes. Self employed individuals are not able to claim tax relief for subsistence costs.
Eligibility Criteria Depending on Your Line of Work
The eligibility criteria for tax relief on travel expenses can vary depending on your line of work.
For example, those who work in the construction industry may be eligible to claim back expenses for travel to and from a site or multiple sites (provided you work at the site for no more than 24 months, otherwise, at that point it becomes classed as a permanent workplace). Those who work in sales can also typically claim back expenses for travel to and from client meetings.
Understanding the specific eligibility criteria for your line of work can help you to claim back all eligible expenses and minimise your overall tax burden, which we can support you with here at IN Accountancy.
How Can IN Accountancy Help?
Tax relief on travel expenses can significantly reduce your overall tax burden. Therefore, it is essential to ensure you are claiming all the tax relief you are eligible for. As a remote worker, you may be missing out on valuable tax relief benefits that you are entitled to. However, by seeking the advice of a qualified accountant, such as IN Accountancy, you can be sure that you are making the most of all the tax relief options available to you.
Our team of qualified accountants has extensive experience in supporting clients with their tax affairs, including claiming tax relief on travel expenses. Contact us today on 0161 456 9666 or firstname.lastname@example.org to discuss your tax returns and find out how we can help you to maximise your tax relief entitlements.