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Guidance on employee travel

HMRC have updated their guidance on employees’ travel and subsistence in booklet 490, available on the Gov.uk website. The publication provides numerous examples illustrating which journeys do and do not qualify as business journeys and are eligible for tax relief.

No tax relief is available for ordinary commuting or private journeys. Ordinary commuting is where the employee travels to their normal workplace, however, where he or she travels to a temporary workplace then the journey qualifies as business travel.

A temporary workplace is a place where it expected that the employee will work for a period not exceeding 24 months and then usually return to the normal workplace after the temporary posting.

A temporary workplace can also be a place where the employee works no more than 40% of their time even where this may be for a period exceeding 24 months. So an employee working at another location for no more than 2 days a week (out of 5 days) could treat that location as a temporary workplace.

Booklet 490 also confirms that where the journey counts as a business journey then any reasonable subsistence costs such as hotels and meals would also qualify for tax relief.

Company Car Advisory Fuel Rates

These rates are the suggested reimbursement rates for employees’ private mileage in their company cars and are reviewed each quarter on 1 March, 1 June, 1 September and 1 December.

The rates that apply from 1 September 2015 are shown below, with the previous quarter’s rates shown in brackets, if changed:

engine size

petrol diesel LPG

1,400 cc or less

11p (12p)

7p (8p)

1,600 cc or less

9p (10p)

1,401cc to 2,000cc

14p

9p

1,601cc to 2,000cc

11p (12p)
over 2,000cc 21p 13p (14p)

14p

Remember also that if you reimburse your employees the tax free amount of 45p a mile (25p after 10,000 miles) for using their own car for business purposes then 20/120ths of the above amounts can be reclaimed as input VAT by your business. For example a petrol engine car over 2,000 cc = 21p x 1/6 = 3.5p VAT a mile

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