HM Revenue & Customs (HMRC) permit you to off-set your legitimate business expenses against your tax liabilities, allowing you to increase your take-home pay. As you can imagine, tax legislation is vast and can be interpreted in a number of ways. Our guidance is correct at the time of publishing. For specific enquiries please contact any of the Liberty Bishops tax experts or visit the HMRC website here.

Protecting Your Interests

Protecting Your Interests and Completing Your Expense Claim Forms

There may be occasions where we query or disallow expense claims. We do this to protect you from any future investigations by HMRC. Consulting with our clients is key to optimising earnings whilst remaining HMRC compliant.

Here are some easy to follow tips regarding your receipts:

  • It is mandatory for all claims to be accompanied by a receipt, except where a claim is made using HMRC's benchmark scale rates
  • You should retain original receipts and provide Liberty Bishop with photocopies
  • Good practice is to claim expenses regularly (weekly or monthly)
  • Receipts two-months or older before the date of submission may not be processed. 

Click here to visit our useful forms page where you can download Expense Claim Forms and our full Expense Policy.

What you can claim at a glance

PLEASE NOTE: Travel and subsistence allowances will be abolished from April 2016

Travel

Travel costs incurred from home to your workplace are only allowable if your workplace is deemed as temporary. A workplace is not deemed as temporary if attended for a period of more than 24 months, or if it is your intention to attend the same workplace for the entirety of your employment.

Further guidance on whether your workplace may be regarded as temporary can be sought at www.hmrc.gov.uk (or see booklet 490 - here). You can also contact our us for further information.

Subsistence

Subsistence is only allowable if travel is allowable.

We adopt the benchmark scale rates introduced by HMRC from 6th April 2009. The benchmark scale rates that apply from 6th April 2009 are:

Breakfast rate £5.00
One meal (5 hour) rate £5.00
Two meal (10 hour) rate £10.00
Late evening meal rate £15.00

Breakfast rate

Paid when you depart for work earlier than usual AND before 6.00am. You must have incurred the cost of breakfast taken away from your home and after a qualifying journey has commenced. If you regularly leave home before 6.00am this rate does not apply.

Late evening meal rate

Paid when you work later than usual AND finish work after 8.00pm, having worked your normal day, AND you purchase a meal that you would normally eat at home, before a qualifying journey ends.

Breakfast and late evening meal rates are not intended for regular early or late work patterns.

One meal (5 hour) rate

This can be claimed when you have purchased a meal on a qualifying journey of five hours or more.

Two meal (10 hour) rate

This can be claimed when you have purchased a meal on a qualifying journey of ten hours or more.

Benchmark scale rate payments are limited to three meals within a 24 hour period. A meal is defined as a combination of food and drink and would take a normal dictionary meaning. Where you are required to start early or finish late on a regular basis, the over 5 hour and 10 hour rate, whichever is applicable, may be paid provided that the other qualifying conditions are met. The other qualifying conditions are:

  1. The travel must be in the performance or your contractual duties or to a temporary place of work. 
  2. You must be absent from your normal place of work or home for a continuous period in excess of five or ten hours. 
  3. You must have incurred the cost of a meal after starting your qualifying journey.

Each qualifying journey must include the start and end time from your home for each subsistence claim. The cost of meals prepared at home and consumed on a qualifying journey is not allowable

Paid when you work later than usual AND finish work after 8.00pm, having worked your normal day, AND you purchase a meal that you would normally eat at home, before a qualifying journey ends.

Rented Accommodation

If you rent accommodation away from your home address to undertake your contractual duties, you may be able to off-set a proportion of expenses, such as rent and utilities, against your tax liabilities.

Hotel / B&B

All reasonable costs are allowable, provided that you have a permanent residence with a different address.

Incidentals

Incidentals associated with an overnight stay can be claimed at £5.00 per night.

Telephone

Business calls made from your home telephone are allowable. A copy of the itemised bill highlighting business calls is required.

Mobiles

Business calls made from your mobile telephone are allowable. A copy of the itemised bill highlighting business calls is required. Pay As You Go costs are not allowable.

Entertainment

Entertainment is not allowable.

Mileage Allowance

Only business miles are deductible and must be documented in a daily log of journeys. We have provided a log on the reverse of the Expense Claim form.

Mileage Rates

The current rates allowable:

Cars & Vans: The First 10,000 miles in tax year 45p per mile
Cars & Vans: Each extra mile above 10,000 miles 25p per mile
Motorcycles 24p per mile
Bicycles 20p per mile

The Liberty Bishop team is staffed by trained experts in travel and subsistence and will answer all your questions. Call 0800 136 047 to make sure you’re not missing out on your take-home pay.

Our Expense Policy is available for download here.

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