Quick answer
You can claim the cost of business travel, including rail, bus, air, and taxi fares, when you travel to a temporary workplace or between workplaces. Ordinary commuting from home to a permanent workplace is not deductible. Most UK public transport is zero-rated for VAT, so there is no VAT to reclaim on train, bus, or air fares, but the full fare is an allowable expense.
Is business travel tax deductible in the UK?
Business travel is deductible; commuting is not. The line between them is the concept of a permanent versus a temporary workplace. Travel from home to a permanent workplace is ordinary commuting and gets no relief, even if you take business calls during the journey. Travel to a temporary workplace, or between two separate workplaces in the same employment, qualifies for relief.
A temporary workplace is one you attend to perform a task of limited duration or for a temporary purpose. The classic trap is the 24-month rule: the moment you expect to attend a site for 24 months or more, it becomes permanent and the journeys stop qualifying, even before the 24 months have passed. This sits alongside mileage relief, which covers the same temporary-workplace test for journeys in your own vehicle.
How much can you claim?
For public transport, taxis, and air travel you claim the actual fare. For journeys in your own car, you use the mileage allowance rates rather than actual fuel and running costs. There is no fixed cap on business travel, but the cost must be a reasonable one incurred wholly for business.
The VAT treatment varies by mode:
| Mode | VAT treatment | Input VAT to reclaim |
|---|---|---|
| Rail, bus, tube | Zero-rated | None |
| UK and international flights | Zero-rated | None |
| Taxi / ride-hailing (VAT-registered driver) | Standard 20% | Reclaimable |
| Congestion charge, tolls | Outside scope or standard | Varies |
Worked example. A consultant travels from her London base to a client in Leeds for a six-week project: a £140 return rail fare, a £25 taxi, and a £12 tube journey. The whole £177 is deductible. There is no VAT to reclaim on the rail or tube fares, but if the taxi driver is VAT-registered she can reclaim the £4.17 VAT within the £25.
Record-keeping requirements
Keep the ticket or fare receipt and note the business purpose and destination for each journey. For VAT you need a valid receipt to reclaim input tax on standard-rated fares such as taxis. Retain travel records for six years for VAT and for the income or corporation tax retention period. Where a workplace is approaching the 24-month threshold, keep a note of when your expectation changed, because that date determines when relief stops.
How to claim, step by step
- Confirm the journey is to a temporary workplace or between workplaces, not ordinary commuting.
- Check the 24-month rule has not turned the destination into a permanent workplace.
- Claim the actual fare for public transport, taxis, and flights; use mileage rates for your own vehicle.
- Reclaim input VAT only on standard-rated fares such as VAT-registered taxis, not on zero-rated rail, bus, or air travel.
- Code the cost to travel and attach the fare receipt with the destination and business reason.
- Employees claim relief through Self Assessment or form P87; the self-employed deduct it in the trading accounts.
Common mistakes
- Claiming home-to-office commuting as business travel. It is private even if you work during the journey.
- Missing the 24-month rule, so travel to a long-running site is claimed after it has become a permanent workplace.
- Trying to reclaim VAT on zero-rated rail, bus, or air fares where there is no VAT to reclaim.
- Claiming both mileage and actual fuel for the same car journey.
- Losing the taxi VAT receipt, which is the only mode where input VAT is usually recoverable.
Software that helps
Travel receipts arrive in a dozen formats, from app emails to paper tickets, so the win is getting them all captured and coded the same way.
- TravelPerk books and itemises business trips and feeds the spend straight into the ledger.
- ExpenseFlow captures rail, air, and taxi receipts from email and photos, applies the correct zero-rated or standard VAT treatment per mode, and posts the journey to Xero or QuickBooks coded to travel.
- Trainline for Business issues VAT-ready receipts for rail travel.
FAQ
See the answered questions above for commuting, the 24-month rule, VAT on different transport modes, home-based businesses, and flights.