How can you manage travel and accommodation expenses in the most financially secure way? We’ll outline what your employees can claim as travel expenses and how to manage and automate employee travel expenses.
When it comes to managing employee expenses, what can your employees claim as travel expenses? How can you manage travel and accommodation expenses in the most financially secure way?
Client meetings, presentations, events, and conferences are all important tools for growing and scaling your business.
We’ll outline what your employees can claim as travel expenses and how to manage and automate employee travel expenses.
What can employees claim as travel expenses
Many of the expenses that your employees accrue on a work-related excursion qualify for tax relief from the government.
That said, there is no tax relief in regards to ‘ordinary commuting’ or standard travel from home to work. Tax relief only comes into play if a workplace is temporary; a location your employee visits irregularly for a limited period of time. It is not their designated permanent workplace. This is an important detail to grasp and you can learn more by reading HMRC’s detailed employment income manual.
In general, employees are entitled to claim tax relief for money spent on:
Learn which travel expenses can be claimed and which can’t via HRMC’s Tax and National Insurance contributions for employee travel article.
Employee travel expenses policy best practice
As we have covered, there are nuances as to what employees can claim as a travel expense. You should therefore have a detailed policy to help you to maintain a sense of order and transparency.
For example, it’s not always clear what qualifies as private or personal vs. work-related travel expenses. Let’s say an employee travels from home to a permanent workplace. They then travel from the permanent workplace to a temporary workplace. In this instance, the first leg of their trip is not eligible for tax relief but the second leg is. Grey areas like this should be outlined in your policy.
A structured policy will help limit employee overspending. In a Soldo survey with over 2,500 UK employees, staff expense claims cost UK businesses £1.9 billion a year. Employees spend an average of £117/month on unauthorised expenses.
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.
A clear-cut policy combined with technology can nip behaviour like this in the bud.
Here are some best practices to implement for a successful expenses policy:
Tips for managing travel expenses
Technology like Soldo makes managing a detailed policy a breeze. With Soldo, you can automate expense management and use prepaid cards to manage employee travel spending.
You can guarantee that your employees don’t overspend with a preset budget for their prepaid and virtual card. You can even set flexible spending limits by category so they don’t go over the preset values. If an employee requests more funds, you can instantly transfer more funds with the click of a button.
Further, Soldo makes it easy to claim and track travel expenses. Employees can instantly capture receipts with the Soldo mobile app. The don’t need to store paper receipts and complete time-consuming expense forms.
Prepaid cards also protect your employees from incurring foreign exchange fees on personal or company credit cards. Soldo’s low fee FX business cards have a fixed 1% foreign exchange fee to keep your travel costs low.
Unlike other prepaid business card providers, Soldo lets you issue separate cards with their own unique numbers. Each travel transaction runs through Soldo and appears in your central admin console so you can see what’s being spent—instantly.
Soldo’s admin console provides a summary of each employee’s transaction history and spending limits. This means you can update their budgets as needed.
The rules around employee travel expenses can be confusing. It’s important that you familiarise yourself with the government rules and regulations before writing, implementing or updating your travel policy.
Once a policy is in place, managing travel and accommodation expenses shouldn’t be a headache. Ditch outdated paper systems and company credit cards by investing in technology that saves your finance team valuable time.
Soldo is your ticket to smarter travel spending.
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