How to Claim Travel Expenses When Going Abroad: A Guide for UK Taxpayers

Travelling abroad for work can be an exciting opportunity, but it often involves a range of costs. Fortunately, UK taxpayers are entitled to claim tax relief on many of the expenses incurred during international business trips. By understanding the rules around claiming travel expenses, you can significantly reduce your tax liability and avoid being out of pocket for necessary business-related costs.

In this guide, we’ll cover the types of expenses you can claim, how to document them properly, and key mistakes to avoid when submitting claims to HMRC.

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What Travel Expenses Can Be Claimed?

When travelling abroad for business, you can claim various expenses, provided they are “wholly, exclusively, and necessarily” incurred for work purposes. Let’s break down the key categories of expenses you can claim:

1. Flights and Transportation

• Airfare: The cost of flights to and from your business destination is fully claimable. Whether it’s economy, business, or first-class, the expense is allowed as long as the travel is for business purposes.
• Ground Transportation: You can claim expenses for taxis, buses, trains, and hired cars used during the business trip. If you hire a car abroad, the cost of fuel, tolls, and parking is also claimable.

2. Accommodation

• Hotels or Airbnb: The cost of accommodation is claimable, as long as it’s necessary for your business trip. This includes the room rate and any service charges or taxes applied by the hotel.

3. Meals and Subsistence

• Meals: You can claim for meals while travelling on business, including breakfast, lunch, and dinner. However, HMRC expects claims to be reasonable. Lavish or excessive meal costs may not be fully deductible.
• Subsistence: HMRC provides guidelines for subsistence, offering a daily allowance (per diem) to cover meals and beverages while abroad. The amount varies depending on the country you visit and is designed to simplify the claims process.

4. Business-Related Expenses

• Conference Fees and Event Costs: If you attend conferences, trade shows, or other business events, you can claim the registration fees and any related costs, such as materials or access to networking events.
• Telephone and Internet: Roaming charges and internet fees incurred for business purposes while abroad can be claimed.

5. Incidental Costs

• Visas and Travel Insurance: If your trip requires a visa or travel insurance, the costs are allowable business expenses.
• Vaccinations: If you need vaccinations specifically for business travel, these can be claimed as an expense.

6. Currency Exchange Fees

• Currency Exchange: If you exchange currency for your trip, the fees associated with this can be claimed, as long as the money is used for business purposes.

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How to Document Your Expenses

Accurate record-keeping is crucial when claiming travel expenses, particularly for international trips. Here’s how to ensure your records meet HMRC requirements:

• Receipts: Always keep receipts for all expenses. If a receipt isn’t available (e.g., for a taxi fare), make a note of the amount, date, and purpose.
• Expense Reports: Create an itemised expense report for each trip, including dates, locations, and the business purpose.
• Credit Card Statements: Using a business credit card helps match transactions to receipts, simplifying your accounting process.
• Currency Conversion: HMRC requires foreign expenses to be converted to GBP. Keep track of exchange rates or use HMRC’s rates for accurate claims.

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How to Claim Travel Expenses

1. For Employees

• Reimbursement: Employees can usually claim travel expenses through their employer’s reimbursement process. You’ll need to submit an expense report with receipts to be reimbursed.
• Tax Relief: If your employer doesn’t reimburse you, or only reimburses part of your expenses, you can claim tax relief from HMRC. This is done through a P87 form or as part of your Self Assessment tax return.

2. For Self-Employed Individuals

Self-employed individuals claim travel expenses through their Self Assessment tax return. Simply include allowable travel costs under business expenses. This will reduce your taxable income and, therefore, the tax you owe.

3. For Limited Companies

If you own a limited company, travel expenses should be paid directly by the business. These expenses are deducted from the company’s profits before corporation tax is calculated.

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Common Pitfalls to Avoid

1. Mixing Personal and Business Travel

Only claim expenses related to business activities. If your trip has both business and personal elements, only the business-related portion of the expenses is deductible. For instance, if you extend a business trip for a holiday, the additional accommodation and meal costs for the holiday period cannot be claimed.

2. Insufficient Documentation

HMRC requires detailed records to support your claims. Failing to keep proper documentation can result in rejected claims or penalties. Always keep receipts and other evidence for all claimable expenses.

3. Excessive or Unreasonable Claims

While claiming necessary expenses is perfectly acceptable, avoid making claims that may seem excessive. HMRC will scrutinise claims for lavish meals or unnecessary expenses, especially if they don’t align with the business purpose of the trip.

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Tips for Maximising Your Travel Expense Claim

• Plan Ahead: Before your trip, familiarise yourself with HMRC’s guidelines on allowable expenses, especially for international destinations. This helps you budget accordingly and ensures you’re claiming everything you’re entitled to.
• Use Per Diems: For meals and subsistence, HMRC’s per diem rates can simplify claims. Using these set rates can eliminate the need to keep receipts for every meal, making the process smoother.
• Consult a Professional: If you’re unsure about what you can claim, consider consulting a tax advisor or accountant. They can provide advice tailored to your situation, ensuring you maximise your claims while staying compliant with HMRC rules.

Claiming travel expenses for business trips abroad can significantly reduce the financial burden of work-related travel. By understanding what you can claim, keeping detailed records, and following the correct procedures, you’ll ensure that you’re not out of pocket for necessary business costs.

Whether you’re an employee, self-employed, or a business owner, making the most of these tax relief opportunities can make international business trips more affordable and less stressful. If you’re unsure about any part of the process, don’t hesitate to reach out to Helpbox for expert advice and guidance.