Last updated: 18 October 2026
Do you only get tax relief for second-class travel and 2-star hotels?
No. There’s no rule limiting tax relief to standard-class rail tickets or budget hotels. If travel and accommodation are wholly and exclusively for business, you can claim the actual cost, whether that’s first-class rail, business-class flights or a 4-star hotel. HMRC can challenge costs that are clearly extravagant or include a personal element, such as a luxury resort chosen for a holiday, but a reasonable choice for a business trip is allowable for sole traders, companies and employees.
What’s allowable
| Cost | Allowable? |
| First-class rail for a business journey | Yes |
| Business-class flight to a client meeting abroad | Yes |
| 4-star hotel near a conference venue | Yes |
| Hotel upgrade for a partner travelling with you | No, partner’s share is personal |
| Extra nights for sightseeing | No |
| Travel to your normal place of work | No (commuting) |
| Meals while away overnight on business | Yes, reasonable cost |
Employees and directors
For employees, reimbursed business travel and accommodation is exempt if it would have been deductible had the employee paid it. Paying for first-class travel doesn’t change that. Where the trip has a personal element, the private part is a taxable benefit.
Mixed business and leisure trips
If you extend a business trip for a holiday, the flight is usually still allowable if the main purpose is business, but the extra hotel nights and leisure costs aren’t. If the main purpose is a holiday with a meeting attached, the travel cost isn’t allowable.
Example
Marcus, a self-employed consultant, travels first class from London to Edinburgh for a 2-day client project, costing £320, and stays 2 nights at a 4-star hotel for £380. He stays a third night with his wife at his own cost. He can claim £320 travel and £380 hotel. If his wife’s travel had been paid from the business, it would be personal and not allowable.
Cash basis sole traders
Under the cash basis, you claim business travel on the same basis. Simplified mileage rates (55p and 25p from 2026/27; 45p and 25p before) apply to vehicle journeys if you choose them.
Overseas travel
- Flights and hotels for business trips abroad are allowable
- Subsistence while abroad is allowable at reasonable cost or HMRC scale rates for employees
- Travel to a foreign trade show is business travel even if you combine it with a short break
Common mistakes
- Assuming only economy travel is allowable
- Claiming a partner’s costs
- Claiming extra holiday nights
- Not keeping receipts for each journey
Records to keep
Keep tickets, hotel invoices and a note of the business purpose of each trip, such as the client or event. This answers most HMRC questions.
Companies paying for directors
If your company pays for your travel, the same principle applies. The company deducts the cost as a business expense, and there is no benefit in kind for a director on a genuine business trip, whatever the class of travel. Board minutes or a travel policy help show the trip was for company business.
Frequently asked questions
Can I claim an airport lounge?
Usually yes, as part of the journey.
Can I claim a car hire upgrade?
Yes, if for business.
Is travel insurance allowable?
Yes, for business trips.
Does VAT apply to train tickets?
No, rail fares are zero-rated.
Related: overnight expenses for sales reps, claiming without hotel receipts and passport and visa costs.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with business travel claims. See our sole trader 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.
