The Smart Pay team will provide advice in relation to expense claims on an individual basis, as the rules governing business expenses an employee can claim tax relief on are complex. This will ensure that you are not exposed to a tax liability. This Guide is for reference only.
“Business expenses” that you have incurred wholly, necessarily and exclusively in the performance of your employment duties can be claimed. If you incur an expense that your agency/client will be reimbursing, we need to invoice your agency/client for this. Therefore, please make us aware on your expenses claim form that they will be reimbursed, and how much your agency/client has agreed to pay. You will also need to ensure that you send the receipts of the expenses that will be invoiced to the agency/client.
What you need to understand in the first instance is the type of expenses to claim. The Smart pay team will ensure that the rules used to review expense claims by HMRC are followed.
You can claim travel to a temporary place of work, as long as your circumstances allow for this. Expenses associated with travelling to, or working at, a temporary worksite are allowable for up to 24 months at one site provided you do not expect to be at that site for more than 24 months, or you spend less that 40% of your time at a specific site.
If you are claiming travel to a temporary place of work then you are also able to claim subsistence expenses (food and beverages).
You can claim a daily allowance to cover the subsistence costs that you actually incur during your working day for each day that you spend at a temporary workplace – subject to restrictions:
Hotels or accommodation
Costs incurred staying away from home for a business purpose will be eligible for reimbursement. Receipts are required.
Personal Incidental Expenditure (PIE)
This is an allowance that can be claimed at the rate of £5 per night in the UK and £10 per night overseas for incidental expenses incurred when away from home. No receipts are required.
Important notes on expenses
- Expenses will only be processed up to three months after the date the expenditure occurred.
- Claims cannot be made in advance.
- Copies of all claims and receipts should be kept for use on your personal tax form. The tax office may require you to provide explanations in support of your claims.
Detailed below is a summary of the special rules that the Smart Pay team will operate. This is for information only.
Broadly speaking, you can always claim for the cost of a business journey. In addition, if you work at a workplace for the purpose of performing a task of limited duration or other temporary purpose, this workplace is a temporary place of work. Travel to this temporary workplace is allowable.
A special rule restricts a temporary purpose to “a period of continuous work which lasts, or is likely to last, more than 24 months”.
If, however, an employee spends less than 40% of their time at this place, it is not regarded as a period of continuous work and travel may be allowable for a period of greater than 24 months provided the 40% of time is not broken. You cannot claim for any private travel.
Different forms of transport are treated in different ways:
Your own vehicle mileage
When you use your own car for business (which includes lease and hire cars), the detail below is used to calculate the amount you can claim for all motor costs including petrol, depreciation, wear & tear and maintenance. The amount you receive depends on how many miles you have already travelled in the tax year. Since the amount calculated covers all motoring costs that we will process, no claims can be accepted for anything other than miles travelled.
|Up to 10,000 miles||45p per mile|
|10,000 miles plus||25p per mile|
The rates for Authorised Mileage Allowance Payments (AMAPs) being used by HMRC are for all engine sizes Please include accurate mileage as regular checks are made.
Your own Motorcycle or Bicycle
You may claim mileage for the use of your motorcycle or bicycle. The current rate is 24p per mile for a motorcycle and 20p per mile for a bicycle.
Toll Charges, Parking and Congestion Charges
We require the original ticket/receipt with amount and date detailed. An associated travel claim is also required.
Train, Tube and Bus
We require the original ticket/receipt, original bank/credit card statement or credit card voucher showing the date and amount of the ticket.
We require the original receipt showing date and amount. If taxi receipts received are for a high amount please provide written confirmation of why this form of transport was required.
These are viewed on a case-by-case basis and written confirmation of why the flight was necessary may be required. We require the original ticket/receipt, original bank/credit card statement or credit card voucher showing the date and amount of ticket.
We require the original ticket/receipt, original bank/credit card statement or credit card voucher showing the date and amount of ticket.
Regular Working Hours. During your regular working hours at a temporary workplace the following rates apply:
- Meal Rate – at least 5 hours away from home / regular work place – £5 per day; or
- Meal Rate – at least 10 hours away from home / regular place of work – £10 per day
Irregular Working Hours. If you have to start early or work late in addition to your normal working day the following rates apply:
- Breakfast Rate – Leave home before 6am – £5 per day
- Late Evening Meal Rate – Leave work after 8pm – £15 per day
All claims will be reviewed against timesheets.
Although you do not have to submit receipts to claim subsistence allowances, you must have purchased the meals that you are claiming for and you should keep receipts as a record of these purchases. You can claim a maximum of 3 meals per day (24 hours).
Hotel or Accommodation
This is viewed on a case-by-case basis and in some instances proof of your permanent residential address in the form of an original/copy utility bill may be required. We require the original accommodation receipt clearly stating the amount paid, dates of stay and the name and address of the establishment. Associated travel is also required showing you travel home to your permanent residence on a regular basis if this is viable.
As previously stated, the rules for tax relief on travel are complex and this is only a Guide. Further details, and a large number of examples, are available in HMRC booklet 490 that you can download from the HMRC website. Alternatively you can simply leave it to our expenses team to process as per these rules.
Please go to the HMRC website for a list of approved Professional Bodies. We require the original receipt or original bank/credit card statement showing amount paid, Professional Body name and period. If you pay these by direct debit you should provide the original / copy bank statement each time a claim is made.
Only the cost of genuinely protective clothing, which has to be worn as a matter of physical necessity due to the nature of the job, will be allowed (e.g. overalls, protective boots and gloves) and purchased from a specialised retail outlet. In order to process any claim we will need original receipts or original bank/credit card statement clearly showing amount paid, date and the retailer’s name and an explanation as to why the clothing is essential.
Telephone calls (landline or mobile)
We require a copy of your itemised telephone bill. Please scan and email to us with business calls highlighted.
Expenses and your personal tax
If your earnings from the company (including expenses) are greater than £8,500 per year, the company has a statutory obligation to provide you with a statement of all expenses paid to you during the year. This is provided in the form P11D.
Smart Pay Limited currently holds a Dispensation granted by HMRC relating to Travel, Accommodation & Subsistence expense claims. Therefore, these do not need to be disclosed on your P11d. Should there be other types of expenses claimed for, the P11D will be sent to you before 6th July following the end of the tax year. This information should be disclosed on your personal tax return (Self Assessment Form).
To claim tax relief for expenses, you may need to show that they were incurred wholly, necessarily and exclusively in the performance of your duties. Therefore, you should remember to keep a copy of expense claims and receipts.
This Guide is based on our current procedure. It does not constitute a legal undertaking.
Smart Pay Limited reserves the right to refuse, without reason, any claims made which it may from time to time deem necessary. In no way should the text contained within this Guide be interpreted as to impart a “right to claim expenses”. Such claims are processed as part of an additional service offered by Smart PAY Limited, which is subject to withdrawal without notice.
This information relates only to your expenses claimed as an employee of Smart Pay Limited.