Your one-stop guide to business travel expenses

27 April


As your company grows, it becomes increasingly important – and complicated – to keep a lid on your expenses.

The more people you hire and the further they travel, the easier it is for money to go awry. A simple spreadsheet might suffice when you’re first starting out, but moving forwards, it’s crucial to take the necessary measures to ensure business travel expenses don’t spiral out of control.

The good news, however, is that travel expenses don’t have to burn a deep hole in your company bank account. They’re actually one of the most controllable expenses for businesses; it’s just a case of understanding what they entail and what facilities are available to support you.

Here, Allstar presents your ‘ultimate guide to business travel expenses’.

Part 1: Types of travel expenses

First and foremost, you need to understand the types of travel expenses that can be claimed for, so you can accurately submit your UK employee expenses statistics to HMRC. This will help you determine which modes of travel you should encourage for staff, ensuring your invoices and records contain all the required information.

By road: Private vehicles

For business journeys, you can claim back a certain amount of money for every mile you or your employees travel. The allowable mileage rates are 45p per mile for cars (25p after 10,000 miles) and 24p per mile for motorbikes.

You can also claim tax relief for parking, maintenance and repairs, hire fees, bridge and toll fares, providing you keep hold of the receipts.

An extended guide to vehicle allowances is available here.

By road: Train or plane

Corporate train travel and plane ticket costs are both allowable expenses – so long as they are for business-related journeys and not personal trips. Additional fees for things like excess baggage and on-peak price pushes can also be claimed for.

You can claim tax relief on all types of ticket (i.e. first class, business class, economy), but you should consider setting out explicit guidelines when creating a travel expenses policy for employees (we’ll elaborate on this a little later).

By road: Bus or taxi

Bus and taxi fares are also claimable. These types of trips tend to be bought impromptu on the day of travel (rather than booked beforehand), so you’ll need to encourage employees to keep hold of their receipts for proof of purchase.

Accommodation and general expenses

Employees will need a place to stay during their trip, and hotel fees are eligible for tax relief. These can be charged to the company by staff, and claimed back when you come to submit your tax return.

Again, the price cap on the hotel should be agreed upon with the business beforehand. If the member of staff needs to book a hotel spontaneously due to delays or other circumstances, they should check the business travel expenses policy to determine which accommodation options qualify for reimbursement.

There are also “incidental overnight expenses” which can be claimed on business trips only. Things like telephone call charges, laundry, and dry cleaning. The subsistence allowance rates for these expenses currently stand at £5 per night for overnight stays in the UK, and £10 per night abroad. Again, keep hold of receipts for these, to help you see exactly where every penny is going.

For food and drink during travel, HMRC accepts £10 for breakfast/lunch in the UK (£15 in London), and £30 for dinner (£40 in London). All purchases must be supported with a valid receipt.

Part 2: Managing your fleet

Road travel is one of the biggest travel expenses for many British businesses, which is why effective fleet management is so integral to controlling costs.

There are a wide variety of different things you can do to run a fluid fleet, including training your staff to drive in a fuel-efficient manner, keeping cars in top condition, installing technology that tracks travel, and purchasing vehicles that are appropriate given the size/demands of your business.

Economical driving 

Teaching your staff to get the most out of their fuel and drive in an energy-efficient manner can make a huge difference when you submit your expense report at the end of the financial year.

To encourage eco-driving, set up a reward system and leaderboard so the most environmentally-friendly drivers are compensated for their efforts to reduce fuel emissions.

If your staff take green driving seriously, you’ll see a significant reduction in fuel spends – and your carbon footprint.

Repair and maintenance

The better state your vehicles are in, the likelier you are to save money on fuel prices and expenses. Keeping the engine and other mechanical parts in prime condition ensures the vehicle is always operating at maximum capacity, hitting a higher mile-per-gallon ratio (that means more fuel per penny).

Diagnostic tools are an essential part of fleet risk assessment; helping you detect and prevent faults in your fleet before they become an issue. Frequent maintenance checks will ensure optimum vehicle performance, which may even lead to reductions on your fleet insurance.

GPS tracking

Fitting GPS tracking systems to your fleet is an effective way of determining whether vehicle travel matches up with the reports you receive from staff. If there are any discrepancies or strange-looking claims being made on expense forms, you’ll be able to address them immediately by consulting the GPS data.

Tracking also lets you keep an eye on your vehicles wherever they may be, so you can more accurately plan logistics and gain reassuring peace of mind.

Consider the best cars for your business

It’s important to think about the most appropriate vehicles given your line of work and size of your company.

Does every employee need their own vehicle or is car-sharing a possibility? Do your fleet vehicles meet UK emission standards (you could be entitled to lower fuel rates and cheaper fleet insurance if they do). Is there a type of car best suited to the style of journeys your employees make (e.g. short/long trips)?

Auditing your fleet can identify opportunities to downsize, eliminating unnecessary expenses.

Part 3: Managing your expense system

Reducing costs also comes down to shaping an expense system that actually works. Managing the amount your staff spend when they’re out on the road involves putting time into building a rigid expenses policy, reviewing deals in place with vendors, and taking advantage of the tech available (including fleet management software and fuel card systems).

Enforce a fair, clear expenses policy

The key to keeping costs down on travel and subsistence is creating a business expense policy that everyone understands, feels obliged to comply with, and finds it easy enough to do so.

Make sure the document is permanently accessible and written in layman’s language in a clear, concise format. Always consult the law before inserting a particular clause into your policy, and conduct regular reviews so you can keep it updated.

Review deals with vendors

Vendors will be much more likely to offer you a competitive price if you’re willing to do your research and shop around.

Be sure to re-examine the deals you’re getting for your fleet on a regular basis, especially when renewal windows arise on contracts. The odds are there’s a better deal out there – and your current vendor may be willing to slash prices if they fear you’re considering switching partners.

Fleet management software

Smart fleet management software has the ability to track where vehicles travel, show you how much money is being spent on journeys overall, and organise all your expenses into one convenient location. 

Advanced digital software provides vital expense management advice and ensures you keep everything neat and tidy – strengthening your grip on cost control in the long-term.

Fuel card system

A fuel card system allows you to separate your business travel expenses from all others – with a HMRC-friendly invoice generated off the back of transactions. That means all staff fuel expenses are accounted for in a stress-free manner – rendering you eligible for discount petrol and diesel prices in the process.

As you can see, there’s a fair bit to wrap your head around for business travel expenses, but fuel cards remain one of the integral components of a cost-effective system. Check out the Allstar fuel cards range today. You’re guaranteed to find one that’s perfect for your business and fleet; saving you hundreds (even thousands) of pounds each year on your business travel expenses.

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