Director Travel Expenses:
What You Can (And Can’t) Claim For Tax Relief
As a director in an owner-managed business, travel expenses can quickly stack up, but HMRC rules about what you can actually claim for tax relief are anything but simple. Here’s a clear guide on what’s allowed, what isn’t, and how you can make sure the right journeys are tax-deductible—without falling foul of the rules.
What Travel Costs Are Allowable?
You can claim tax and NICs relief on the cost of travel (and the associated incidentals) if you’re traveling for genuine business purposes. This means travel:
Between different workplaces
To work appointments
For other business activities
That includes travel by train, car, taxi, plane—if the trip is for business, and you’ve got the paperwork to prove it, expenses like these are generally fine.
Incidental costs related to travel are also covered:
Subsistence (your food and drink, within reason)
Accommodation costs (overnight hotels, flats)
Additional incidental overnight costs (like laundry)
Keep your receipts, and make sure it’s all for work—not personal jollies.
What About Home-To-Work Journeys?
The big restriction: no tax relief for ordinary commuting.
Most directors can’t claim for the cost of traveling from home to their permanent workplace, unless:
You’re going to a temporary workplace (more on that later)
Or, your home qualifies as a workplace for your business
If neither of these conditions is met, that daily drive or train to HQ is just a regular commute—so, not claimable.
Permanent vs Temporary Workplaces: The Key Distinction
Permanent Workplace
A permanent workplace is basically where you work all or most of the time. It’s defined as:
The place you spend the whole employment contract working
Or, you work there over 40% of your time, for at least 24 months
Travel from home to a permanent workplace is ordinary commuting—no tax relief.
Temporary Workplace
You’re in luck if your journey is to a temporary workplace, which means:
You go there to do a short-term task or for some other temporary purpose
You’re there for less than 24 months
As long as you aren’t solely employed to be based at that temporary site, these journeys are allowable for tax relief.
But here’s the catch: if the workplace is really just your usual base, but dressed up as a string of "temporary" assignments in the same place, HMRC will consider it permanent.
Triangular Travel & Grouped Assignments
If you do a journey like Home → Temporary Workplace → Permanent Workplace, you might be able to claim relief on the whole journey, depending on facts.
If you keep taking on contracts in the same area, and there’s little difference in your daily commute (after the 24-month rule), HMRC may class it as a single permanent workplace and knock out your expense claims.
When Home Qualifies as a Workplace
Owner-managers sometimes use home as a base. If so:
Travel between home (as your workplace) and other sites can be tax-deductible.
To prove this, you’ve got to be doing substantial, fee-earning duties at home—not just the odd bit of bookkeeping or email.
Tip: It’s easier if your home is your registered company address and you actually earn money from work you do from home, e.g., research, report writing, client support.
If your company reimburses you: No tax or NIC to pay, and your company gets a corporation tax deduction.
If you pay yourself: You can claim it back on your Self Assessment tax return, but the company can’t deduct the cost itself.
But: If you split your time and work sometimes at home and sometimes in the office, “ordinary commuting” rules kick in for the days you travel in. No relief there.
Director-Specific Catch: Directors Are Taxed Like Employees
Even if you’re the boss, directors are taxed as employees when it comes to expenses. This applies unless you’re self-employed—those rules are different.
For directors:
Same strict home-to-work rules apply
The trick is proving that travel is required for business, not just chosen for convenience
IR35, Employment Intermediaries & Section 339A ITEPA 2003
If you’re working via a personal service company (PSC), managed service company (MSC), umbrella company, or employment agency, AND:
Your contract falls within IR35 (i.e., you’re subject to control by your client),
Then: NO tax relief is allowed for travel and subsistence between home and work locations. Each contract is classed as a permanent workplace for you, wiping out the usual temporary workplace benefit.
If there’s any fraud, directors can be personally on the hook for unpaid PAYE and NI, too.
What Actually Qualifies as a Workplace?
There’s no one-size-fits-all answer, but think about:
Where you perform the substantial, fee-earning parts of your work
Where your company is based or registered
Where the business admin is done
Where support services (like emergency support) are handled
Review these facts regularly—especially if your contracts or working locations change!
Accommodation, Hotels, and Subsistence
When your travel is allowed as a business expense, so too are the related extras:
Hotels or rental flats
Meals and reasonable incidental costs
Overnight expenses
Remember: keep records, ensure these costs are only for you (or apportion the expenses if family/friends travel too), and only claim for what you’d spend on your own for work.
"Depot Rule" and Sales Patches
If you have to report each day to a central depot, fixed base, or regular sales patch, that’s usually your permanent workplace—even if you don’t spend much time there. Those commutes = not allowable.
Travel for Non-Residents
Non-UK directors: if you’re a non-resident director of a UK company, the same logic applies to your expenses, but there are extra rules for reporting earnings and expenses.
Key Tax (and Practical) Tips
If your home is also your base of operations and you do real, billable work from there—document it!
If you want to maximise allowable travel, ask clients to include "home-based" elements in your contract.
Keep all travel, accommodation, and subsistence receipts.
Regularly review whether your workplaces are “permanent” or “temporary”.
Common Pitfalls for Owner-Managers
Assuming all home-to-client travel is claimable: Not always—check the workplace status.
Letting short contracts in the same spot stack up: The 24-month rule and grouping rules may catch you out.
Doing just admin at home: Not enough to make home a “workplace”.
Thinking IR35 doesn’t apply: If it does, travel relief rules are much tighter.
Every case is unique: the facts matter.
PJL Accounts: Navigating the Maze Together
Still scratching your head over what qualifies as an allowable travel expense? You’re not alone—these rules are some of the trickiest out there for owner-managers and directors. At PJL Accounts, we live and breathe these details so you don’t have to.
Whether you’re looking for clarity on your own situation or want a friendly, jargon-free chat, just get in touch with our team. We’ll help you make sense of the fine print (and maybe save a bit of tax, too).
Take a look at more resources for limited company directors or check out our financial tips for small business owners.
Disclaimer: This explainer summarises the rules as provided by HMRC and relevant legislation. Always review your facts and consult professional advice if you’re unsure.
