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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Travel expenses: general: accommodation and subsistence: include associated subsistence

Sections 337 to 339 ITEPA 2003

Sections 337 to 339 ITEPA 2003 allow a deduction from earnings for certain travel expenses. Section 337 allows a deduction for expenses necessarily incurred in the performance of the duties and sections 338 and 339 allow a deduction for expenses attributable to the employee’s necessary attendance at a place in the performance of the duties except where they are expenses of ordinary commuting or private travel.

The guidance at EIM32350+ and EIM32000+ respectively explain how to identify where travel is in the performance of the duties or is for the employee’s necessary attendance.

Following the decision in Nolder v Walters (15TC380) ‘travel expenses’ for this purpose include the actual costs of travel together with any subsistence expenditure and other associated costs that are incurred in making the journey. This includes:

  • any necessary subsistence costs incurred in the course of the journey
  • the cost of meals necessarily purchased whilst an employee is at a temporary workplace
  • the cost of the accommodation and any necessary meals where an overnight stay is needed. This will be the case even where the employee stays away for some time

The examples in EIM31816 demonstrate when business journeys begin and end.

A deduction is only allowed for subsistence costs which are attributable to the business travel i.e. costs incurred in the course of the journey which are additional to any costs that the employee would ordinarily incur if they were not travelling on business. For example a deduction would be allowed for the cost of a sandwich purchased at a station whilst travelling on business but not for the cost of a sandwich prepared at home and consumed whilst travelling as this is not a cost incurred in the course of the journey. Further examples can be found in EIM31817 and EIM31818.

In addition you should exclude costs incurred as a consequence of the travel that are not incurred in travelling but result from the circumstances of the employee, for example the cost of putting a pet dog in kennels while away from home.

Once it is accepted that the employee has incurred allowable subsistence expenses you do not need to take into account the costs saved as a result of the business travel. For example, if the employee needs to eat in a restaurant while on a business trip you can permit a deduction for the full cost of the meal and should not make any adjustment for the costs saved by not eating at home. There is guidance at EIM31835 onward about the action to be taken where you consider that payments for accommodation, subsistence or other expenditure attributable to business travel are unduly lavish.

Where relief for business travel is given at statutory mileage allowance relief rates and not for actual costs (see EIM31200 onwards) this does not prevent relief for subsistence and accommodation costs. Mileage allowance relief applies to the costs of using the employee’s own vehicle and does not prevent relief for additional costs attributable to business travel that are not costs of using that vehicle.