If you’re a freelancer, or about to start freelancing, you may be wondering if you’re entitled to claim for your travel expenses. For employees this is pretty straightforward – just hand it over to your employer and let them sort it out. For freelancers, it’s not so clear cut. We explain what travel expenses freelancers can claim for, and how to claim.
Are freelancers entitled to claim for travel?
As a business owner you can, and should, claim for business expenses. HMRC tax freelancers on their profits, not their income, so it’s essential that you deduct your expenses from your year-end total. In other words, make sure that you don’t land yourself with a bigger tax bill than you should.
Travel costs can be counted as a business expense, but there are limitations as to what types of travel can be included. The golden rule with any type of expenses is that it is “wholly, exclusively and necessary” for the business. You can claim for travel costs, but only if they’re business related. No school runs and shopping trips on HMRC, we’re afraid!
Commuting costs vs. business travel expenses
When freelancers are working out their claim for travel expenses, it’s important to distinguish between a commute, and a travel expense. In short, if you’re travelling to a business premises or job site in order to do your work, that’s a commute, and you can’t claim for it. If you’re going to a meeting, or a training course etc, then you can claim for the cost of travelling there and back.
What can freelancers claim for?
Now that we know you can only claim for business-related travel expenses, what does this actually apply to? Some examples of what you can claim for include the following:
Car mileage. This is typically either a fixed rate per mile, or you can work out your actual expenses using detailed records of your mileage.
Repairs and servicing for a vehicle, though this may not be the case if you also use the vehicle for personal travel as well.
Vehicle hire, though you may only be able to claim for a portion of this if it’s a long-term hire.
Car parking charges, but you will need to keep receipts.
Public transport such as travel by bus, train, air or taxi, provided you have receipts or invoices to provide.
Tolls and congestion charges
How do freelancers claim for travel expenses?
To claim for travel expenses, freelancers should include them in the total expenses on their Self Assessment tax return.
While you won’t need to hand over proof of your expenses with your tax return, it’s important to keep hold of them anyway. There’s always a chance that HMRC will conduct an investigation into your business so you’ll need evidence to back up your claims.
This evidence is easy to keep if you upload receipts into accounting software. That way everything is kept securely in the cloud and you don’t have to deal with drawers full of crumpled receipts.
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About The Author
Forensics graduate-turned copywriter and blogger. I love turning complex topics into easy to understand, yet engaging pieces of content.