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What travel expenses can you claim?

One of the benefits of working as a limited company contractor is that you can claim tax relief on work-related travel including mileage and use of a personal vehicle.

Mileage, travel and subsistence (ie. food and drink) can be claimed, but only when you are operating from a temporary workplace.

It’s important to be aware of the 24-month rule which deems that you can only claim tax relief on the cost of travel from your home to a client’s premises if it’s classed as a temporary place of work.  This covers train, bus and taxi fares (within ‘reasonable use’).  If your contract extends beyond 24 months you will not be entitled to classify travel costs as a business expense.

When using a personal vehicle to get to a temporary workplace you can claim mileage at the rates shown in the table below.  Your mileage should be recorded on your company accounts as this will help to reduce your overall Corporation Tax bill.  If you drive a company car, you can only claim the cost of fuel in your expenses.

Business mileage rates 2019/20

VehicleRate per mile (on first 10,000 miles in tax year)Rate per mile (on each mile over 10,000 miles)
Cars and vans45p25p
Motorbikes24p24p
Bicycle20p20p

 

For more information about other allowable business expenses see our article What expenses can limited company contractors claim? or download our free Guide to Limited Company Contracting.

 

 

 

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