Train & rail fares

Conditions

• Rail fares for qualifying business journeys are an allowable travel cost. HMRC's self-employed expenses guidance explicitly lists 'train, bus, tram, air and taxi fares' as allowable costs (GOV.UK, updated November 2024). The self-employed test is whether the journey is wholly and exclusively for the trade.
• Ordinary commuting — travel between home and a permanent workplace — is never allowable for any trader or employee, regardless of how far or how infrequent the journey is.
• For employees, the 24-month rule determines whether a destination counts as a temporary or permanent workplace. A workplace becomes permanent — and fares to it become non-deductible commuting — once you have spent, or expect to spend, 40% or more of your working time there over a period lasting more than 24 months. The rule runs on expectation: if a posting is known from the outset to last more than 24 months, it never qualifies.
• For a limited company, rail fares for directors and employees on qualifying business journeys are an allowable cost for corporation tax purposes, and no benefit-in-kind arises where the journey is wholly for business.
• Season tickets present a particular challenge: where a ticket covers both commuting and business journeys on the same route, only the portion attributable to business travel is deductible. In practice this can be difficult to calculate, and separate point-to-point tickets bought for business trips are simpler to evidence.

Common mistakes

• Claiming a season ticket in full when it primarily covers commuting.
• Treating travel to a client or supplier site as business travel when it has become so regular and predictable that it functions like commuting.
• Forgetting that the 24-month rule runs on expectation — if the posting is always intended to last more than 24 months, the fares are non-deductible from day one.

What to keep

• Tickets, e-ticket receipts or booking confirmations.
• A note of the business purpose of each journey.
• For employees, records that the destination was a temporary rather than permanent workplace.

Real-world example

A management consultant travels by rail from Bristol to a client's London office twice a week for a project engagement. In the first 24 months the fares are allowable business travel. When it becomes clear the engagement will continue well beyond 24 months, she logs the date the expectation changed and stops claiming from that point.

Frequently asked

Related allowances