All about business travel

Reimbursing travel expenses

Travel is essential for many companies. Employees may need to travel on company business for a wide variety of reasons and for varying lengths of time, from just a few hours to London for an important management summit, to several weeks in another country to help a global company set up a new office. This travel gives rise to additional costs, known as travel expenses. Employees can be reimbursed for a wide range of business-related travel expenses, including:

Train, bus and air tickets
Road tolls, congestion charges, fuel, vehicle wear and tear, insurance
Visits to or meetings with clients, suppliers, etc.
Overnight accommodation such as a hotel
Car rental
Meals, drinks and tips
Conference fees
Parking fees
Dry cleaning

Business phone calls and printing costs

Mileage allowance

An employee may decide to use their own personal vehicle during a business trip within the UK or elsewhere in Europe. This also incurs costs, including fuel, wear and tear, road tolls, congestion charges and parking fees. These costs can be reimbursed by the employer in the form of what is known as a “mileage allowance”. A certain level of mileage allowances can be paid to an employee each year without having to be reported to HMRC. These are known as “approved amounts”. Anything above the approved amount has to be reported to HMRC and included in the company’s tax returns.

The tax rates for business travel are based on the type of vehicle used (car, motorbike, van, etc.) and the distance travelled.

Business travel management

Within a company, a specific member of staff may be appointed to undertake all tasks relating to business travel management. This may be someone within the HR, accounting or purchasing departments and they may be referred to as the ‘travel manager’. Their role is to ensure a consistent view of business travel across the company and to help make employees’ lives easier when travelling. The tasks that they are responsible for include:

coordinating travel
booking tickets
booking accommodation
ensuring safe travel for employees
collating receipts
monitoring expenditure
reimbursing employees for eligible expenses
reporting on expenditure

La gestion des déplacements professionnels-min

Developing a travel policy

A corporate travel policy sets the framework for business travel for all staff across the company. It is an internal document which covers every aspect of business travel including:

The budget to be respected for each reservation
Suitable types of accommodation
Eligible modes and classes of transport
Conditions for the reimbursement of costs
Safety rules
Partner travel companies to be used
Partner hotels to be used
The allocation of air miles and other loyalty schemes
Internal approval procedure, etc.

An internal corporate travel policy aims to ensure that rules are applied fairly and transparently to all employees within the company, while ensuring the corporate travel budget is optimised. When well-prepared, it can save time, facilitate travel arrangements, and ensure transparency.

Business travel and air miles

When travelling on business within the UK, Europe or further afield, employees may be able to benefit from what are known as “air miles” offered by various airline companies. Air miles are basically loyalty points which airline companies use to reward frequent flyers. They can be collected and then exchanged at a later date for upgraded travel or hotels, airport transfers, flights, etc. For most companies, air miles are seen as a means of compensating employees for the inconveniences associated with business travel, including jet lag, night-time flights, fatigue, stress and the impact on their home life.

FAQ

How are travel expenses justified?

Travel expenses may be advanced by the employer before the business trip takes place or may be reimbursed to the employee after the trip upon submission of a receipt. Employees must be able to justify the expenses they have incurred during business trips. These expenses must be reasonable and necessary as part of their trip. Luxurious, extravagant and unnecessary expenses are not reimbursed. Receipts allow employees to recover the actual cost of the business trip when they return to the workplace. Receipts are essential for good book-keeping and to ensure compliance with HMRC regulations.

Valid receipts must include the date of the expense, the total amount of the expense, the vendor’s name and the purpose of the expense.

What is the purpose of business travel?

Certain aspects of corporate life are best carried out face-to-face, and employees may be required to travel for business for any number of reasons. Meeting clients and suppliers in person is a great way to consolidate business relationships. Prospecting for new clients or scouting new locations can only really be achieved by travelling to the site. For a multinational company, regular visits to other branches or offices may also be an essential part of maintaining links across different parts of the same company.

Are all expenses covered?

Eligible travel expenses are those which are necessarily incurred when travelling for the purposes of conducting business-related activities and services. Only reasonable and necessary travel expenses are covered, such as transport, accommodation and meals. Luxurious, extravagant or unnecessary expenditure is not covered by travel expenses. Receipts containing information on the exact nature of the expense are usually required to justify costs.

How long is a business trip?

A business trip may last just a few hours, as in the case of an employee taking a train from Manchester to another city to take part in an event. However, business travel may also involve being away from the workplace for several days to take part in a conference, or even weeks if the employee is helping set up a new office or monitor progress on a large project. The nature of the business travel expenses covered will obviously depend on the nature of the trip and how long the employee needs to be away from home.