Self Employed Travel Expenses

Understanding what self employed travel expenses can be claimed is something you would think would be relatively simple to explain but it’s surprisingly one of the trickier of the HMRC allowable expenses to understand.

This guide is for self employed sole traders, the guidance does not apply to limited company travel expenses where there is a different set of rules for claiming travel costs.

When it comes to understanding if the cost of business travel is allowable as a tax deductible expense, it will depend on where your business operates from and the type of business you are running.

Home to work travel

Travelling from home to work will usually be a HMRC allowable expense in the below circumstances:

  • If your home is either your only place of work or very much your main place of work
  • If the type of work you do is ‘itinerant’ in nature and based in a patch around your home – HMRC give the example of a builder.

However travelling from home to work is usually NOT allowable when:

  • Some business activities are conducted from home but your work is also done at other locations at times that are either regular or predictable
  • If equipment is stored at a depot site and you pick up items from there before going on to work somewhere else.
  • If you’re home is not actually your business base

For example – if as part of your normal course of work, you visit the same office every Monday morning for a meeting and/or to collect essential files or equipment – this would be considered to be both regular and predictable. As such, during a HMRC investigation these business travel expenses could be challenged and ultimately disallowed for tax purposes.

Self Employed Travel Expenses

Base of operations

A key factor as to whether or not your business travel expenses are allowable is establishing where your base of operations is, if you can justify that your home is your base of operations then you’re well on your way to justifying to HMRC the travel expenses for your business.

Key things that can help prove that your home is your base of operations include:

  • the majority of your work time is spent at home
  • your admin and paperwork is done from home
  • sales are made from home
  • you prepare and agree your contracts at home
  • using your home address on all your official paperwork and correspondence
  • storing your business equipment at home
  • you meet with your clients and suppliers at home

It’s important to remember that you must not claim any private element of your self employed travel expenses and you must also ensure you keep sufficient records to justify the reason for and amount of your business travel – this means keeping receipts for all your self employed expenses and also a log recording your business journeys.