Allowable Travel and Subsistence Expenses for a Company Director
- Stephen Kelly
- Feb 12
- 3 min read
Travel and subsistence expenses for a company director are a notoriously grey area of tax legislation and a understanding of these rules is key to managing tax efficiently whilst staying fully compliant with HMRC. An overview of the rules is as follows:
So What Does Classify As Allowable Expenditure For A Company Director?
To be allowable expense by a company director it must be incurred :
Wholly and exclusively for business purposes, and;
Incurred necessarily in performing your duties as a director of the business
Travel Expenses: What Can You Claim?
You can claim travel costs if the journey is:
For business purposes (e.g. visiting clients, meetings)
To a temporary workplace (One you work at for less than 24 months)
Allowable Travel Costs:
Train, Tube, bus, and air fares
Car mileage at HMRC rates (45p per mile for the first 10,000 miles -then 25p thereafter)
Parking, tolls, and congestion charges
Taxis
Not Allowable:
Daily commute to a permanent workplace
If you’re at a Temporary workplace regularly for over 24 months, it can become a permanent workplace and travel to it is no longer claimable.
Private or personal travel
Subsistence Expenses
When travelling on business, you may claim either actual subsistence costs like those shown below as long as they are supported with receipts on your business records.
When travelling for business, you may also claim for:
Meals and drinks
Hotel or B&B accommodation
Incidental overnight expenses (e.g. Wi-Fi, laundry)
An alternative approach is to use HMRC’s Own Benchmark scale rates as this approach does not require copies of receipts to be maintained.
The current rates for domestic journeys for the 2025/2026 Tax year are:
5-hour rate: £5 (when you’re away from your normal place of work for 5 hours or more)
10-hour rate: £10 (when you’re away for 10 hours or more)
15-hour rate: £25 (when you’re away for 15 hours or more, and your travel is ongoing at or after 8 pm)
Late evening supplement: an additional £10 if you’ve already claimed the 5- or 10-hour rate and are still travelling after 8 pm
Other General Points to Consider
Working from Home?
If your home is your main office:
Travel to a client site or meeting can be claimable
You must keep clear evidence that your home is your regular place of work
You can claim a certain percentage of bills that increase by working from home, or a flat rate of £6 per week
There can be Capital Gains Tax issues if part of your main home is used within a business, so professional Tax Advice should be obtained if your are unsure of Complex and far reaching rules.
Record Keeping Tips
Use a bookkeeping platform like Xero to keep receipts
Maintain a travel logs
Use a business payment/credit card where possible
Document mileage and accommodation claims carefully
Keep personal and business expenses separate
Common Mistakes to Avoid
Claiming for daily commuting
Not keeping receipts
Mixing personal with business travel
Ignoring the 24-month rule
Tax Treatment
The company can deduct valid expenses against Corporation Tax
If correctly processed, directors won’t face extra personal tax
Use proper reimbursement or expense policies to avoid P11D reporting
Final Thoughts
Being a director offers flexibility—but HMRC expects clarity. By understanding what you can and can't claim, and keeping proper records, you stay tax-efficient and compliant.
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