Last updated: 18 October 2026
Can a sole director be paid for business travel by their own company?
Yes. A sole director is an employee of their company, so the company can reimburse business travel costs tax-free, or pay them directly, under the same rules as any other employee. Business travel means journeys you make for work, such as visiting clients or temporary workplaces, but not ordinary commuting to a permanent workplace. If you use your own car, the company can pay you up to 55p a mile for the first 10,000 business miles in 2026/27 (45p in earlier years) and 25p after, free of tax and National Insurance.
What the company can pay tax-free
| Cost | Treatment |
| Business mileage in your own car | 55p/25p a mile tax-free; deductible for the company |
| Train, air, taxi and bus fares for business trips | Reimbursed tax-free |
| Hotels and meals on business trips | Reimbursed tax-free, if reasonable |
| Parking and tolls on business journeys | Reimbursed tax-free |
| Commuting from home to a permanent office | Taxable if paid |
| Fines | Taxable and not deductible |
Where is your permanent workplace?
Many sole directors work from home. If home is genuinely your company’s base and you travel to clients or sites from there, those journeys are usually business travel. But if you go regularly to one office or client site, HMRC may treat it as a permanent workplace, so travel there is commuting. The 24-month rule decides whether a client site is temporary: if you expect to work there for more than 24 months, spending 40% or more of your time there, it’s permanent.
IR35 and contractors
If you work through a personal service company and IR35 applies to a contract, each engagement is treated as a separate employment, and travel to that client is usually ordinary commuting, so not tax-free.
Example
Emma is the sole director of a design company and works from home. In a year she drives 6,000 miles to clients. Her company pays her 6,000 × 55p = £3,300 tax-free and deducts it for corporation tax, saving about £825 at 25%. It also reimburses £1,100 of train fares and £400 of hotel costs.
Records to keep
- A mileage log with dates, destinations, purposes and miles
- Receipts for fares, hotels and meals
- An expense claim form or spreadsheet signed by the director
- Evidence of where the company is based
VAT
VAT-registered companies can reclaim VAT on hotels, business meals while travelling and the fuel element of mileage payments, with a fuel receipt. Train fares have no VAT.
Paying the director
Expenses can be paid with salary or separately. If the company pays more than the approved rates, the excess must go through payroll as taxable pay. Many directors claim monthly, so the director’s loan account stays accurate and receipts aren’t lost.
Frequently asked questions
Do I need to report mileage payments?
Not if they’re within the 55p/25p rates.
Can my company buy my car?
Yes, but a company car is a taxable benefit. Electric cars have a low rate, 4% of list price in 2026/27.
Can I claim travel to my accountant?
Yes, it’s a business journey.
Can I claim travel abroad?
Yes, if the trip is for business.
Related: business travel expenses and motoring expense records.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with director expenses. See our limited company accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 18 October 2026. It is not personal advice, so speak to an accountant about your own situation.
