For some employees, commuting for business comes as a part of the job. While workplaces have overwhelmingly supported the move to hybrid and remote working, more than half of Britons are commuting for work again according to CityAM and Data from the Office Of National Statistics. For the average small business owner, this can add to be a significant cost to their business at the end of your financial year-end. As a part of managing your small business finances, SME owners and managers need to consider the pros, cons, and practicalities of commuting for business. From mapping out the cheapest commuting option to exploring the tax reliefs and how applicable they are to your business commute needs, here is a quick rundown of what you need to consider when business travel begins to become a factor.
Do You Have Travel Insurance In Place?
Travel insurance may be viewed as an additional business cost but it also provides key protection against uncertainties. Similar to a standard travel insurance policy, business travel insurance provides cover against loss or damage of business equipment, company money, and more importantly, any changes in travel plans. Travel delays and disruptions can throw a wrench into your business travels and add additional costs.
Do You Have The Right Travel Policies In Place?
Another factor to consider when trying to control business travel costs is the method of commute you or your employees choose. If business travel is a regular cost to your business, it is essential to have the right business travel policies in place. This will set clear guidelines for your employees on what qualifies as a business commute expense and the process to follow to reclaim expenses. It may also help to plan ahead. While some business trips are unexpected, you can plan and book ahead for business events throughout the year. You can also utilise technological travel tracking aids to help keep costs down when mapping out your business commute for upcoming solo and group trips. According to Split My Fare (https://www.splitmyfare.co.uk/cheap-train-tickets/), you can purchase cheaper Advance tickets up to 12 weeks before you plan to travel. Train travel can also be more economical for longer journeys, particularly to busy locations like Central London since you avoid the congestion charges and traffic delays when driving.
Can You Benefit From Frequent Traveller Rewards And Tax Perks?
Many businesses can benefit from tax write-offs for their business travels. However, this is subject to it meeting strict criteria from HMRC and it begins with understanding what qualifies as business travel expenses. Based on the definition used by HMRC, businesses can apply for business travel tax relief if it is public transport costs, parks fees, congestions charges, and mileage. Managers should keep in mind that the normal commute to and from workplaces along with penalty fines or speeding tickets are not deductible.
This can also get tricky if you are an employee or small business owner who mixes personal and business travel. To qualify as a business trip for tax relief purposes, the commute must either be a journey an employee needs to make to perform their duties (as a part of their role) or Journeys between places in the performance of their duties such as temporary worksites. If your job or business is site-based, there may be specific rules for claiming business travel expenses. If you do qualify, this can bring down the cost incurred to your business every year. Another way to manage business commute costs is to explore frequent travel rewards. This is particularly useful if you travel for work often.
In the UK, people take 8.98 million business trips per year. Business travel accounts for £39 billion in travel spending. For a small business, this can add up to be a sizeable outgoing in their budget- and an expense to keep an eye on. The good news is that by employing these and other cost control strategies, you can keep the cost of commuting for business down.