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Claiming Travel Expenses In The Construction Industry

Claiming Travel Expenses In The Construction Industry

When you work in construction, a typical year can put a lot of miles under your wheels and take a lot of cash out of your pocket. From groundworkers and scaffolders to joiners and electricians, the everyday expenses you run up doing your job can leave a serious dent in your wallet. Far too many workers in the building trade are missing out on the tax refunds HMRC owes them for work-related costs and mileage expenses, and there’s no good reason for it. Here’s a quick guide to construction travel tax refunds, and how to make the most of them.

What travel costs can I claim for?
What are the temporary workplace distance rules?
How much can I claim for my work travel?

What If I use public transport?
I drive a company car. Can I claim a tax refund?
What if I work abroad?

Construction Tax Refunds

What are construction tax refunds all about?

When you’re paid via the Pay As You Earn (PAYE) system, you can claim back some of the tax you’ve paid on your earnings. How much you can claim depends on the money you’re splashing out on the essentials of doing your job. We’re talking about things like travel to temporary workplaces and repairing, cleaning or replacing the crucial tools of your trade. Depending on the work you do, the expenses you can claim for will vary. Electricians, for example, may have to fork out for replacing damaged electrical tools. Scaffolders, meanwhile, may find themselves out of pocket on maintaining safety gear and so on. The basic rule is that, if you need it to work and you’re paying for it yourself, it could count as part of your tax refund claim. That goes for any food and accommodation bills you rack up while on the road, for instance. Even fees and subscriptions to professional bodies and unions can qualify, along with certain types of training, as long as it’s all essential.

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PAYE Tax Refunds

What travel costs can I claim for?

One regular cost that basically every construction worker has to contend with is work travel. In fact, for most people, that’s where the bulk of their yearly tax rebate comes from. If you travel for work, and not just to work, then you may have a refund claim. That means the taxman’s not just going to stuff your pockets full of cash every time you put your key in the ignition. There are specific rules on the kinds of work travel that count for tax refunds. For example, if you always work in the same place and drive there from home every day, that’s just a regular commute. You can’t claim anything for that. In the building trade, though, most of the real work gets done at “temporary workplaces”.

In HMRC’s eyes, a temporary workplace is a site you’re working at for under 24 months. As long as you remember that rule, you shouldn’t go too far wrong. As with everything else in the tax world, though, things are never quite as simple as that. For instance, if you spend less than 40% of your time at a workplace, it might count as temporary even if you’re there for more than 24 months. Knowing exactly where you stand is the key to getting the most out of your tax refunds, which is why so many people call in the professionals to handle their claims.

Here’s another example. If you end up working at the same workplace for longer than you were originally expected to, your situation can change. In that case, you can usually still claim for travel to and from your workplace for that original 24-month period.

Temporary Workplace Distance Rules

What are the temporary workplace distance rules?

This is another area where HMRC’s rules can get a little tangled. Sometimes, you change workplaces without making much difference to your travel time and costs. For the new workplace to count as separate from the old one, both the travel cost and physical journey made must be different. As you can imagine, there's quite a lot of wiggle room in the definitions here. Of the two factors, though, the cost is usually the main decider. If there’s not enough of a difference in the taxman’s eyes, then he’ll probably say you’ve accepted a permanent workplace when you move to the new site. Naturally, that also means your old worksite no longer counts as temporary either.

Just to show this working in practice, let’s assume Bob the joiner accepts a job on a site that’s set to last 18 months. After a while, though, things change:

At the 12-month mark in his new workplace (Site A), Bob's told that he'll be moving to another site (Site B) once his agreed 18 months are up. Site B is just a short hope from Site A anyway, so Bob's happy to agree.
HMRC tells Bob that, since there's no real difference in his travel time or costs for the new site, as far as the rules are concerned it's the same place.
From the point that Bob accepted the upcoming transfer to Site B, he's now expecting his total work time to be 36 months. The taxman tells him this this breaks the 24-month limit in the temporary workplace rules.
Bob can claim his travel tax refund on his costs for his first 12 months at Site A. After that though, his workplace becomes ''permanent''. This means he can't claim anything for the last 6 months at Site A or any of his time at Site B.

Off course, that’s just one example of the weird little wrinkles in the taxman’s rules. Things get even stranger if your job takes you to a range of places over a region. In some cases, if your travel costs and times don’t vary much, it’s actually possible for the whole geographical area to be considered your permanent workplace! Again, knowing exactly what you can and can’t claim for is the only way to steer clear of trouble.

Travel tax rebates

How much can I claim back for my work travel mileage?

Okay, here’s where the rubber hits the road. The amount of tax you can claim back for your work travel depends on the rates and thresholds set out in the HMRC rulebook. They’re called Approved Mileage Allowance Payments (AMAP) and as of the 2019/20 tax year they look like this:

45p per mile for the first 10,000 miles you travel by car or van, then 25p per mile after that.
24p per mile travelled on a motorcycle.
20p per mile for travel by bicycle.

You won’t get taxed on your AMAP payments, so travelling 15,000 miles for work in a single tax year nets you a tax-free payment of up to £5,750. That breaks down as £4,500 for the first 10,000 miles you travelled (10,000 miles x 45p), plus £1,250 for the rest (5,000 miles x 25p). Obviously, this assumes you travelled in your own car or van. The AMAP rates for motorbikes and bicycles are lower, but they're still worth claiming.

Another point to keep in mind is that you have to be footing the bills yourself to claim - or part of them, at least. If you’re already getting at least as much as the AMAP rates say you should from your employer, you can’t claim tax back. However, if you’re getting less than that you can claim back the difference from HMRC. Also, if your employer's paying you a higher rate, then it'll be considered a "benefit". That means you'll owe some tax on the extra. It doesn’t matter how many vehicles you’re using for work. The AMAP rates don't exclusively apply to any one vehicle. The distance you travel in each of your vehicles is simply lumped in together to work out your payments.

On the other hand, if you're on the road for more than one job, then each is usually considered separately. That means you can claim the full AMAP rates for each. The jobs really do have to be separate, though. Working for associated companies or employers probably won't count, and you’ll get heat from the taxman if you try to bend the rules even slightly – so don’t do it!

If you’re taking other passengers to work with you in your car or van, you can claim an extra 5p a mile per passenger. The travel’s obviously got to be work-related for them as well, though, so don’t just load up the kids and family dog and expect a pay-out from the taxman.

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Interested in claiming a construction tax rebate?

If you're working in construction and are thinking you might be eligible for a tax rebate then what are you waiting for? Get started today! Answer 4 quick questions and we'll tell your if you're due a tax refund. Or, you can use our tax rebate calculator. It gives you an instant estimate of how much of much cash you could get back from the taxman. Click on the green button below to get started. The average 4-year refund from RIFT is £3,023.

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Tax rebates on travel expenses

What if I use public transport?

The AMAP rates and thresholds are generally used when you’re doing your work travel under your own steam. However, that doesn’t mean you’re out of luck if you hop the bus to your temporary workplaces. Even coughing up for public transport can get you a tax refund from HMRC. Instead of keeping track of the miles you’ve travelled, though, you’ll need to keep records of the money you’ve spent on tickets and so on. The taxman will always expect you to back up your claims with evidence of what you’ve spent, so don’t lose your paperwork.

Once again, if your employer’s reimbursing you for your public transport costs, you can’t claim any tax back for them. If you’re not getting back as much as you’re spending, though, you might still have a tax rebate claim.

Can I claim a tax rebate?

I drive a company car. Can I claim a tax refund?

If your boss stumps up for a company car for you, you can often still claim a tax refund for your work travel. In some cases, though, your employer may also provide you with free fuel for private use. As always, you can’t claim a tax refund for any expenses you’re not paying yourself, or for anything that’s not necessary for work.

When you're using a company car, the mileage rates (in this case called Advisory Fuel Rates) are different. That's because you're only getting reimbursed for the fuel you're burning on your business travel. You aren't, for instance, getting anything toward maintenance costs, which are figured into the AMAP rates.

As of the 1st of September 2019, the company mileage rates for petrol and LPG vehicles are:

Engine size	Petrol: amount per mile	LPG: amount per mile
1,400cc or less	12p	8p
1,401cc-2,000cc	14p	8p
Over 2,000cc	21p	14p

For diesel vehicles, you're looking at:

Engine size	Diesel: amount per mile
1,600cc or less	10p
1,601cc-2,000cc	11p
Over 2,000cc	14p

Hybrid cards count as either diesel or petrol, as appropriate and there's a separate Advisory Electricity rate of 4p er mile for electric vehicles.

Paying tax and working abroad

What if I work abroad?

When your job has you trekking overseas to temporary workplaces, your tax rebates can get complicated. You might be using a bunch of different types of transport (personal vehicles, trains - maybe even a helicopter or two) and stacking up a load of additional costs along the way. The best advice is always to keep hold of your records, from tickets bought and miles driven through to overnight hotel stays and food bills. These scraps of paper are your ammunition when you go up against the taxman to claim your refund.

Remember - HMRC will never try to cheat you. That’s not how this works. They will, however, insist that you prove every penny you’re owed. Get professional help if you’re having trouble, and never settle for less than you’re due.

Our Guarantee

Our guarantee means you'll never lose a penny

When you claim a tax refund with RIFT, our unique RIFT Guarantee means that you don't have to worry about the taxman reclaiming any of it. So long as you give us full and accurate information, if HMRC disagrees with the amount that we've claimed and ask for the money back, we'll pay it. It won't cost you a penny.

RIFT Guarantee

Need more help?

Wondering if you can claim a tax refund or need to submit a tax return? Use our online tools to find out if you're owed money by HMRC.

Do I Qualify?

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RIFT Refunds, The Cobalt Building, 1600 Eureka Park, Lower Pemberton, Ashford, Kent, TN25 4BF

Call us on 01233 628648

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Claiming Travel Expenses In The Construction Industry​