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Claiming business expenses: Your guide to travel entitlements

As a sole trader, contractor or freelancer, one of the benefits of forming a limited company is the ability to claim expenses to save tax.

We know the rules on what you can and cannot claim are not as simple as we might like, but hopefully this handy guide to travel entitlements will help you to understand what you’re entitled to.

The first thing to remember is that you can claim expenses as long as they are entirely for business purposes.

We’ve separated your possible travel expenses into categories for clarity.

Driving to work

Did you know you can claim fuel and running costs for travel to and from your place of work when you drive.

For the first 10,000 miles in a financial year mileage rates are 45p per mile and 25p per mile for the distance thereafter.

If you drive into the City for work, you’ll be pleased to know you can claim for the congestion charge and for parking.

Even as a passenger in a car you can claim 5p per mile for your journeys to and from work.

You can also claim a mileage allowance for travel by bicycle at a rate of 20p per mile and by motorcycle at 24p per mile.

Fines for speeding or parking offences however are exempt.

Using public transport

If you keep hold of your receipts for your tickets you can claim the cost of travel by public transport.

While it might seem a bit over the top to hold onto all of your receipts, should HM Customs and Revenue choose to look into your records they can look back as far as six years so it’s safer to have them as back up.

We would also recommend that you keep a record of the details of your journeys as supporting evidence for your claims which might be needed later.

In addition to your receipts, we’d recommend that you note down the following:

  • Date of travel
  • Reason for travel
  • Starting location and destination
  • Mileage
  • Type of transport

Working inside of IR35

It is worth saying that it is also possible to claim travel expenses if you are inside of IR35, but it does depend on the circumstances of your contract.

Get in touch for a free, no-obligation chat if you want any more information.

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