Travel Expenses: What Limited Company Directors Can Claim
Travel is one of the most common areas of confusion for limited company directors.
Can your company pay for journeys to clients? What about travelling from home? Hotels? Meals? Mileage?
The basic rule is:
Business travel can usually be paid or reimbursed by your company tax-free. Ordinary commuting cannot.
The important part is understanding the difference.
Directors are treated as employees
For travel expense purposes, company directors are generally treated in the same way as employees.
The main rules are found in sections 337 to 339A ITEPA 2003.
Your company can normally pay or reimburse the cost of qualifying business journeys, including associated costs such as accommodation and reasonable subsistence.
The company can also normally claim Corporation Tax relief on those costs.
What counts as business travel?
Typical examples include travelling:
from one workplace to another;
to visit a client;
to attend a business meeting;
to a temporary workplace;
to a conference, training course or other business appointment.
For example, if you work from your company office and travel to a client's premises for a meeting, that journey would normally be business travel.
What is ordinary commuting?
Travel between your home and a permanent workplace is normally ordinary commuting.
That means the company cannot simply reimburse it tax-free because you are a director.
For example, if you travel from home to the same office every working day, that journey will normally be commuting.
The same can apply even if you also work from home for part of the week.
The decision in Kirkwood v Evans (74 TC 481) confirmed that simply working from home does not automatically make travel from home to another permanent workplace allowable.
What is a temporary workplace?
Travel from home to a genuine temporary workplace can normally qualify.
A temporary workplace is somewhere you attend for:
a task of limited duration; or
another genuinely temporary purpose.
A common rule directors hear about is the 24-month rule.
If you expect to spend 40% or more of your working time at a workplace for more than 24 months, that workplace will normally be treated as permanent.
Once you know that your attendance is expected to exceed 24 months, relief may stop from that point.
However, being somewhere for less than 24 months does not automatically make it temporary.
You still need to look at why you are attending that workplace and your overall working pattern. This is covered in EIM32080.
Example: visiting a client for six months
James runs a marketing company from his usual office.
For six months, he needs to attend a client's premises twice a week to complete a project.
Assuming the client's premises qualify as a temporary workplace, his company can normally reimburse the cost of travelling there.
Associated hotel and reasonable subsistence costs may also qualify where an overnight stay is genuinely required.
Be careful with repeated client locations
Changing contracts does not necessarily reset the clock.
If you repeatedly work at different sites in the same area and there is no substantial change to your normal journey, those locations can sometimes be treated as one workplace.
So changing from one client building to another building around the corner does not necessarily create a new temporary workplace.
The actual facts matter.
What if you work from home?
This is where directors need to be particularly careful.
Working from home does not automatically mean that every journey starting from home becomes business travel.
For example, if you voluntarily work from home three days a week and attend your permanent office two days a week, the journey from home to that office is still normally commuting.
Even where home is genuinely a workplace, travel from home to another permanent workplace will not automatically qualify.
For travel between home and another permanent workplace to qualify under the stricter rules, working from that particular home location generally needs to be an objective requirement of the job rather than simply the director's personal choice. See EIM32370 and EIM32170.
Travel from home to a temporary workplace, however, can qualify in the normal way.
Contractors and Personal Service Companies
There are additional rules for directors providing their personal services through a Personal Service Company.
Under section 339A ITEPA 2003, where the employment intermediary rules apply, each engagement can effectively be treated as a separate employment for travel purposes.
This is particularly relevant where an engagement falls within the IR35 rules.
The result can be that travel from home to the client's workplace is treated as ordinary commuting rather than qualifying business travel.
Contractors should therefore check their IR35 and travel position before routinely putting client-site travel through the company.
Hotels and meals
Where the underlying journey qualifies as business travel, related expenses can also normally qualify.
These may include:
train or air fares;
hotels;
reasonable meals while travelling;
parking;
taxis;
and other necessary travel costs.
The important point is that the journey itself must qualify.
A hotel or restaurant bill does not become a business expense simply because it was paid while working.
Using your own car
If you use your personally owned car for qualifying business travel, your company can reimburse you using the approved mileage rates.
For 2026/27, the rates for cars and vans are:
55p per mile for the first 10,000 business miles, then25p per mile thereafter.
These rates are designed to cover costs such as fuel, insurance, servicing, depreciation and repairs.
So you would not normally claim those car costs separately as well.
Keep a mileage log showing the date, destination, business reason and number of miles travelled.
Simple examples
Home → regular company office
Normally commuting. Not allowable.
Company office → client meeting
Business travel. Normally allowable.
Home → temporary client site
Can qualify if the site genuinely meets the temporary workplace rules.
Home → permanent office on a hybrid-working day
Still normally commuting.
Temporary client site → hotel because an overnight stay is necessary
Travel, accommodation and reasonable subsistence can normally qualify.
Keep good records
For qualifying travel, keep evidence showing:
the date;
where you travelled from and to;
the reason for the journey;
who you were meeting or what work was being performed;
mileage where your own vehicle was used;
receipts for hotels, trains, taxis and other costs.
This is particularly important where you regularly work at client sites or from home.
Final thoughts
The travel rules for limited company directors are not simply about whether a journey is “for work”.
The key question is usually:
Are you travelling to a permanent workplace or a temporary workplace?
Remember:
Ordinary commuting is not claimable.
Travel to genuine temporary workplaces can be.
The 24-month rule is not an automatic two-year allowance.
Working from home does not automatically make travel to your office allowable.
Hotels and meals normally follow the tax treatment of the underlying business journey.
At Busy Bee, we help limited company owners stay compliant, tax efficient and in control of their business finances.
Disclaimer: The content on this page is for general information only and should not be treated as tax, legal or financial advice. Tax planning should always be reviewed against your individual circumstances before action is taken.
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