Your guide to sole trader travel and subsistence expenses

Business travel 

Business travel is generally allowable, but what exactly is business travel? This will depend on how you run your business and where you run your business from. 

Was the journey undertaken wholly and exclusively for the trade's purpose? 

Travelling to and from customers and suppliers is allowable. If your place of business is at home, that means travel from your home to a customer and supplier is allowable. If your place of business is somewhere else, then travel from your home is not allowed as this is ordinary commuting. 

Journeys that are regular and predictable may not be allowed. For example, regular trips from home to somewhere you’re working will be disallowed.  

If you work all over (known as an itinerant trader) and your home is your place of business, for example a construction worker attending different sites all the time, you are usually allowed the journey from home to site/client/customer, and back home again. 

Travel costs 

Travel costs can include fuel, road tax, insurance, breakdown cover, train and bus fares, taxi costs, tolls and parking. 

You can’t claim non-business travel, fines and travel between work and home.  

If travel is for a mixed purpose, only the cost of the part of expenses that is directly attributable to your business can be claimed. You can do this by: 

• claiming a proportion of actual costs by taking all costs and multiplying them by the fraction of business miles over total miles or, 
• claim a flat rate for actual business miles. You can, of course, still claim actual costs for bus/train/taxi fares and parking on top. 

The flat rate amount for mileage is 45p per mile for each business mile for the first 10,000 miles and 25p thereafter. For motorcycles the rate is 24p per mile. 

Once a basis has been chosen, you must continue to use that basis for that vehicle until disposal. When purchasing a vehicle, you may therefore want to look at the calculations of both methods to see which works out to be the best for your business. 

Capital allowances are also available. 

Subsistence 

Subsistence relates to food, drink and accommodation. When these costs are incurred during business travel, they are allowable, provided the cost is reasonable and not excessive. 

Place of business 

If it’s not clear where your place of business is, here’s a list of things to consider: 

• How much time do you work from home? 
• Do you meet customers and suppliers there? 
• Where do you store your stock and/or equipment? 
• Where do your employees work from? 
• Do you pay business rates? 

Sole traders who work from home may be able to claim costs for use of home as office. This includes part of the cost of utility bills, internet, and other expenses directly incurred as a result of running their business from home. Alternatively, a fixed flat rate can be claimed. 

Record-keeping 

It’s very important to keep a record of your business journeys and the number of business and non-business miles completed 

You should also keep receipts and invoices as evidence of expenditure for HMRC. Tax records should be kept for at least five years after the tax return deadline. 

Need more help?

We would be happy to offer more advice about what expenses you can and cannot claim for you and your business, as well as outline the possible allowances available to you. To make a free, initial consultation, please call 0151 515 3636.

Last updated: 29th May 2024