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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Travel expenses: general: introduction: the tests to be passed

Sections 329, 333, 337(1)(a) and 338(1)(a) ITEPA 2003 All deductions for employees’expenses are subject to a number of general rules. These are:

  • the only deductions that can be made are those that are permitted by statute, see Part 5 ITEPA 2003
  • the amount to be deducted cannot exceed the amount of earnings from which it is to be deducted, see Section 329 ITEPA 2003
  • a deduction can only be given to the extent that an expense has actually been incurred or an amount in respect of an expense is included in earnings, see examples at EIM31631 onwards and Section 333 ITEPA 2003
  • a deduction is only permitted for expenses the employee is obliged to meet as holder of the employment, see EIM31640.

Employees who use their own vehicle or bicycle for business travel do not get a deduction for their actual costs but get mileage allowance relief at a fixed rate, see EIM31200 onwards.