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Navigating the Rules: What Contractors Can and Can't Claim While Working Away from Home

For contractors in the UK, working away from home is a common aspect of the job. It can be both exciting and financially rewarding, but it also comes with a set of rules and regulations governing what you can and can't claim in terms of expenses. In this blog post, we'll dive into the intricacies of travel and subsistence expenses for contractors, helping you understand how to make the most of your claims while staying compliant with HMRC regulations.

Understanding the Basics: What Constitutes "Away from Home" Before we delve into the specifics of allowable expenses, it's essential to clarify what "working away from home" means according to HMRC. In general, you are considered to be working away from home if:

  • The location of your temporary workplace is different from your usual place of work.
  • Your work at the temporary workplace is expected to last for less than 24 months (with some exceptions).
  • You have a permanent workplace where you regularly work.

Now, let's break down what contractors can and can't claim while working away from home:

Allowable Travel Expenses:

Mileage: You can claim mileage expenses for using your personal vehicle for business purposes. HMRC provides approved mileage rates, and you can claim a tax deduction based on these rates.

Public Transport: Expenses for train, bus, or plane tickets to your temporary workplace are typically allowable. Keep receipts as evidence.

Accommodation: Costs for overnight stays in temporary accommodation can be claimed. This includes hotel expenses, and “reasonable meals”.

Subsistence Expenses:

Meals: While you can't claim for meals as a general rule, you may be eligible to claim for meals if you're working exceptionally long hours away from your usual workplace. HMRC guidelines state that you can claim for meals if you're away from your normal place of work for more than five hours. However, the claim must be reasonable and justifiable.

Refreshments: You can claim for tea, coffee, and light snacks while on a work assignment. These expenses are generally considered allowable.

Alcohol: Expenses for alcoholic beverages are not typically allowed, as they are considered personal expenses.

Additional Considerations:

Receipts and Records: It's crucial to keep accurate records and receipts for all expenses claimed. HMRC may request documentation to support your claims.

Daily Commute: You cannot claim expenses for your daily commute to your usual place of work. Expenses are only allowable when you're working away from your normal workplace.

Permanent Workplace: If you don't have a permanent workplace and travel from home to various client sites, different rules may apply. Seek professional advice to ensure compliance. 

In conclusion, contractors can claim various travel and subsistence expenses while working away from home in the UK, but the rules can be complex. Staying informed and seeking guidance from a qualified and experienced accountant can help you maximise your allowable claims while remaining compliant with HMRC regulations.

At Red Shoes Accounting, we specialise in helping contractors navigate the intricacies of tax and expenses. Contact us today to ensure you're making the most of your contractor tax benefits.