Travel Rules for the Self-Employed

Travel rules for the self-employed are different than for those who operate through a Limited company.

We have outlined here how to claim motor travel costs, but we must first of all be sure that the travel in question is an allowable expense.

This 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 tax 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 an HMRC investigation this could be challenged and ultimately disallowed for tax purposes.

Base of operations

A key factor as to whether or not your travel is 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 your travel expenses to HMRC.

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 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 travel expenses and also a log recording your business journeys.