Allowable Travel and Subsistence Expenses for a Company Director

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.