For companies of any size, travel expenses are an important part of your business expenses, and tracking them is crucial to keeping your finances healthy. From subsistence allowance to meals with clients and fuel expense costs, knowing how every business journey affects the company wallet is key.
Here, we will run through every aspect of travel expenses and look into the most effective ways of managing them and how Soldo’s business expense card solution works to simplify your expenses on the go.
As a general rule, a travel expense is any business-related charge that you or your team incur whilst out of the office. This could be anything from client entertainment to overnight accommodation. HMRC provides guidelines as to which travel expenses are tax deductible.
Given the unpredictable nature of business journeys, travel expenses can be extremely varied. Whether it’s an unexpected toll road or overnight accommodation, the costs of doing business can quickly add up.
And even though every business needs to manage travel expenses, this isn’t always as straightforward as it could be.
In a Soldo survey with over 2,500 UK employees, staff expense claims cost UK businesses £1.9 billion a year, whilst employees spend an average of £117 per month on unauthorised expenses.
A clear-cut policy can help to keep everyone on the same page.
Here are some best practices to implement for a successful expense policy:
However, even with the world’s greatest expense policy, numbers can still get fudged. 38% of employees claim expenses for things that they know are off-limits or exaggerated. For example, overstating the number of travel miles they needed or altering taxi receipts to inflate the fare.
The right expense management software, combined with a comprehensive expense policy, can simplify spending and make life easier for you and your team.
Soldo takes the guesswork out of expense management. Our app for desktop and mobile connects with prepaid cards. So not only do you always know how much is being spent for a certain period, you can also see exactly when these transactions occur.
With complete visibility and total control, you won’t lose another penny to misreported travel expenses.
An important part of managing business travel expenses is knowing which purchases are eligible for tax relief. Under the ‘travel expense’ umbrella there are a number of categories that have their own rules when it comes to taxation. It’s worth considering how each one applies to your business.
HMRC recognises what’s known as ‘subsistence allowance’. This is a particular fund that an employee is given to pay for business-related expenses.
These charges usually apply to the products or services a travelling employee pays for during the course of their out-of-office duties.
For example, an employee may need to book a hotel room if they’re on an overnight business trip. Because this cost wouldn’t have been necessary without the business requirement, the charge can be considered part of their subsistence allowance. This may also form part of an overall travel expense while on the trip.
This is well worth knowing, because if these transactions are designated as a business expense, you can get tax relief on them, thus saving your business money. Any amount paid to an employee that exceeds the amount they paid for their expense must be taxed.
The key point to remember is that subsistence allowance only applies to costs incurred during the course of business. It absolutely cannot be applied to any personal uses.
Approved mileage allowance payments (or AMAPs) are fixed rates that apply to the use of personal vehicles for business purposes, for some companies these can be an important travel expense. HMRC publishes the maximum amounts an employee can receive without it having to be reported. These tax-free rates are currently 45p for the first 10,000 miles for cars and vans, and 25p for any miles after that.
On top of this, employees are eligible for another 5p per mile if they have a passenger in their vehicle, as long as this passenger is also an employee of the company and it’s necessary for them to go on the trip.
Employers aren’t required to pay these rates, but if they don’t then employees are eligible for tax relief (known as Mileage Allowance Relief) up to the established rate. However, if employees receive an amount higher than these rates, then tax must be deducted from the excess.
To effectively utilise these rates, drivers must keep a detailed log of their journeys, including total mileage and a record of the trip’s purpose. And be sure to double check HMRC’s AMAP rates, as these can change.
Obviously, the more often you and your employees travel for business, the more fuel you use. And that’s an expense you definitely want to keep track of. Lots of businesses use fuel cards to do this.
There is an enormous range of fuel card providers out there that fit business needs in different ways. But if your priority is flexibility and efficiency in managing your travel expenses, Soldo’s fuel cards are the ones for you. Whilst many providers’ cards are exclusive to certain fuel brands and sites, Soldo’s fuel cards can be used at any site in the country. This means drivers don’t need to waste time seeking out certain locations, and they can get on with their tasks.
Soldo’s expense management software means that as soon as an employee pays for fuel, this transaction can be viewed in real-time in the Soldo console. So not only do Soldo’s fuel cards provide maximum flexibility, they also offer complete visibility.
This is great for businesses of any size, but if you have a large fleet of delivery drivers, for example, then you can effortlessly keep on top of company-wide spending.
As we’ve seen, there are a variety of travel costs and tracking them all can be a nightmare. But there is a brighter way. Soldo’s expense management software is designed with businesses in mind, and our prepaid system will make life easier for employees and managers.
Employees who need to travel for work have historically gotten a bad deal when it comes to their travel expenses. Either they paid out of pocket with the promise of a reimbursement, or they were using a shared business credit card, for which they had to keep reams of paper receipts. Learn why Soldo cards are better than a business credit card.
Neither of these options are good for business or morale.
With Soldo, you can assign as many cards as you like to as many individuals as you like. Employees can use it like any other payment card, all they need to do is snap a photo of their receipt and upload it to the Soldo console to keep track of their travel expenses.
Because all the cards are preloaded with a certain budget and have tailored spend-rules, employees know they can make purchases without waiting around for approvals or filling in tedious expense reports. And if an individual ever does need a top-up, they can make that request in the app and managers can approve or disapprove the amount instantly.
Soldo doesn’t just make spending simple for employees, it’s also a comprehensive tool for managers. You can track all of your employees’ outgoings in real-time with the Soldo app. This means you’ll never lose track of a payment, and you can gain precise insights into your company’s spend habits.
All of our prepaid cards are customisable, so not only can you allocate a certain budget, you can also decide when that budget refreshes and what expense types that card can be used for. And if a card does go missing, you can switch it off at the touch of a button.
And because Soldo utilises digital receipt capture, all the spend data from any given period is automatically collated in Soldo, and you won’t have to store piles of paper receipts.
Then once you have your data compiled, Soldo’s integrations with accounts software like QuickBooks and Xero make bookkeeping effortless. Transfer information across in a click, or download your data in an easily exportable format if you’re with another accounting program.
Managing travel expenses is a crucial process for any business, and there are ways to make this simple. With Soldo, you can ensure expenses are handled efficiently, from the allocation of budgets, to the point of purchase, to the reconciliation.
Join thousands of businesses who are optimising their cash flow by signing up for a Soldo plan today.
Travel receipts are the records you keep of costs incurred whilst travelling. You must keep these records not only for your own business, but in case HMRC decides to check the expenses you’ve claimed tax exemptions on. Traditionally, businesses have relied on paper receipts which are then reconciled with bank statements, but this is a laborious process. With a prepaid system like Soldo’s, receipts are all captured digitally, making for a much more efficient process.
The easiest way to calculate your company-wide travel expenditure is to have total visibility of your outgoings. If you can’t see what’s being spent and when, you’re going to be left in the dark. This is where Soldo can help, as our real-time expense tracking means you’ll always know where the money is.
The larger your team, the more complex travel expenses can become. Traditional systems like business credit cards make managing employee travel difficult, as businesses often end up sharing one card. Systems like Soldo exist to make this management simple. In the Soldo console you can view transactions across every card as they happen, meaning you’ll never lose track of who’s spending what.
When you’re looking into travel expenses, the notion of permanent and temporary workplaces is likely to come up. HMRC’s guidelines state that a workplace only counts as temporary if you’ll be working there for less than 24 months. If you do travel to a temporary workplace, you’re eligible for mileage allowance, whereas you wouldn’t be if you were travelling to a permanent workplace, as this is known as ‘ordinary commuting’.
Soldo is a complete spending solution that is designed to make expense management easy. Our prepaid cards are linked with intuitive software, and the combination means that not only can you decide exactly how much cash can go on each card, you can also see exactly when and where it’s being spent. Complete control, complete visibility, complete security. Switch to smarter spending by signing up to Soldo.
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