Travel - general
This guide provides an overview of your main tax and National Insurance
contributions (NICs) obligations if you provide transport for an employee
or if you pay or reimburse their travel costs. It also summarises the
tax and NICs treatment of costs associated with business travel, such
as subsistence and accommodation.
Bear in mind that this guidance offers only an overview of the rules
in this area. To go direct to more detailed information choose the link
to 'Technical guidance'.
Please note also that this guide does not cover the rules that apply
if you make a car or van available for use by an employee, nor the rules
that apply to an employee's travel in their own vehicle. Choose 'More
useful links' from the list below for guidance on these topics.
On this page:
Business travel: you provide, pay for or reimburse
Definitions or restrictions
You cover the costs of an employee's business travel costs in one of the following
ways:
- by directly providing the transport
- by paying a supplier through which your employee has arranged transport
- by reimbursing no more than the necessary costs of business travel
Business travel only covers the following two types of journey which include
- where necessary - travel abroad:
- journeys forming part of an employee's employment
duties - such as journeys between appointments by a service engineer
or to external meetings
- journeys related to an employee's attendance at a temporary workplace
As well as including transport costs, the 'necessary costs of business
travel' also include:
- subsistence costs, such as meals
- accommodation if the travel requires an overnight stay
What to report, what to pay
For employees earning at a rate of less than £8,500 per year, you
have:
- no reporting requirements
- no tax or NICs to pay
For company directors or employees earning at a rate of £8,500 or more
per year:
- report on form P11D - in section K, B or N - unless you have a
dispensation covering this item
- you have no tax or NICs to pay
How a dispensation can
reduce your expenses and benefits reporting
Work out the value to use
The value to use is the cost of providing the transport, or the amount
you pay or reimburse.
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Business travel: you reimburse more than the necessary
costs
Definitions or restrictions
You reimburse an employee with more than the necessary costs of their
business travel.
Business travel only covers the following two types of journey which include
- where necessary - travel abroad:
- journeys forming part of an employee's employment
duties - such as journeys between appointments by a service engineer
or to external meetings
- journeys related to an employee's attendance at a temporary workplace
As well as including transport costs, the 'necessary costs of business
travel' also include:
- subsistence costs, such as meals
- accommodation if the travel requires an overnight stay
What to report, what to pay
Unless your payment to the employee is a scale rate payment that you've agreed
with HM Revenue & Customs (HMRC) then the excess amount above the necessary costs of business
travel counts as earnings, so:
- add it to your employee's other earnings
- deduct and pay PAYE tax and Class 1 NICs using your usual payroll
procedures
Work out the value to use
The value to use is the excess amount, above the necessary costs of
business travel.
Scale rate payments - find out
more
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Private travel: you arrange and pay
Definitions or restrictions
You arrange and pay for transport to take an employee on a private
journey.
Private travel covers all journeys except:
- journeys forming part of an employee's employment
duties - such as journeys between appointments by a service engineer
or to external meetings
- journeys related to an employee's attendance at a temporary workplace
For example, an employee's 'ordinary commuting' journey between their
home and permanent workplace is a private journey.
What to report, what to pay
For employees earning at a rate of less than £8,500 per year, you
have:
- no reporting requirements
- no tax or NICs to pay
For company directors or employees earning at a rate of £8,500 or more
per year, unless one of the exceptions listed below applies, then:
- report on form P11D
- pay Class 1A NICs on the value of the benefit
Work out the value to use
The value to use is the cost to you of providing the transport.
Exceptions
There are no reporting requirements and no Class 1A NICs to pay for
company directors or employees earning at or above the £8,500 rate if
you provide any of the following:
- a works bus service, available to all your employees
- check the conditions by following the link at the end of this section
- transport for an employee with a disability (this only applies
in certain limited circumstances - contact HMRC for further information)
- a taxi home after occasional and irregular late-night working
- check the conditions by following the link at the end of this
section
- a taxi home if a car-sharing system is unavailable due to unforeseen
circumstances - check the conditions by following the link
at the end of this section
- cycles or cycle safety equipment to your employees - check
the conditions by following the link at the end of this section
- transport between home and work where public transport
has been disrupted by industrial action
Exemption for works
bus services - the conditions that apply
Exemption for late-night taxis
- the conditions that apply
Exemption for cycles - the conditions
that apply
Failure of car-sharing arrangements - the conditions that apply
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Private travel: employee arranges, you pay the supplier
Definitions or restrictions
Your employee arranges transport for a private journey, but you cover
the costs by paying the supplier of the transport directly.
Private travel covers all journeys except:
- journeys forming part of an employee's employment duties - such
as journeys between appointments by a service engineer or to external
meetings
- journeys related to an employee's attendance at a temporary workplace
For example, an employee's 'ordinary commuting' journey between their
home and permanent workplace is a private journey.
What to report, what to pay
For employees earning at a rate of less than £8,500 per year, unless
one of the exceptions listed below applies then:
- report on form P9D - section A(2)
- add the value of the benefit to the employee's other earnings when
deducting and paying Class 1 NICs (but not PAYE tax) through your
payroll
For company directors or employees earning at a rate of £8,500 or more
per year, unless one of the exceptions listed below applies, then:
- report on form P11D - section B
- add the value of the benefit to the employee's other earnings when
deducting and paying Class 1 NICs (but not PAYE tax) through your
payroll
Work out the value to use
The value to use is the amount you pay for the transport.
Exceptions
You have no reporting requirements and no tax or NICs to pay in respect
of:
- transport for an employee with a disability (this
only applies in certain limited circumstances - contact HMRC for
further information)
- a taxi home after occasional and irregular late-night working -
check the conditions by following the link at the end of this section
- a taxi home if a car-sharing system that is unavailable due to
unforeseen circumstances - check the conditions by following
the link at the end of this section
- transport between home and work where public transport has
been disrupted by industrial action
Exemption for late-night taxis
- the conditions that apply
Failure of car-sharing arrangements - the conditions that apply
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Private travel: employee arranges and pays, you reimburse
Definitions or restrictions
Your employee arranges and pays for transport for a private journey,
but you reimburse the costs to the employee.
Private travel covers all journeys except:
- journeys forming part of an employee's employment
duties - such as journeys between appointments by a service engineer
or to external meetings
- journeys related to an employee's attendance at a temporary workplace
For example, an employee's 'ordinary commuting' journey between their
home and permanent workplace is a private journey.
What to report, what to pay
These payments count as earnings, so unless one of the exceptions
listed below applies, you must:
- add them to your employee's other earnings
- deduct and pay PAYE tax and Class 1 NICs using your usual payroll
procedures
Work out the value to use
The value to use is the amount you reimburse to your employee.
Exceptions
You have no reporting requirements and no tax or NICs to pay in respect
of:
- transport for an employee with a disability (this
only applies in certain limited circumstances - contact HMRC for
further information)
- a taxi home after occasional and irregular late-night working -
check the conditions by following the link at the end of this section
- a taxi home if a car-sharing system is unavailable due to unforeseen
circumstances - check the conditions by following the link at
the end of this section
- transport between home and work where public transport has
been disrupted by industrial action
Exemption for late-night taxis
- the conditions that apply
Failure of car-sharing arrangements - the conditions that apply
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Where to report - understanding the £8,500 threshold
It's important to choose correctly between forms P11D and P9D for each
employee. The form to use depends on the whether the employee is a director
of your company and on whether their earnings are above or below an
annual rate of £8,500. For more information - including details of what's
included in the £8,500 threshold - follow the link below.
End-of-year forms at a glance
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More useful links
Company cars (including fuel)
Company vans (including fuel)
Mileage expenses for
business travel in employees' own vehicles
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Technical guidance
EIM31800: Travel expenses
NIM06240: Class 1 NICs - Travel expenses
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