Claiming Travel Expenses: A Complete Guide to Reclaiming VAT for Business Trips

The Blue dot Team

As business travel is on the rise, many companies are looking into claiming travel expenses, including potential VAT reclaim. Unfortunately, the complexity involved in VAT reclaim makes it difficult for businesses to maximize their reclaim.

One barrier to VAT reclaim is invoices submitted with incomplete or incorrect information. The company may choose to reimburse the employee for such expenses, but the company will be unable to reclaim VAT that is submitted with a faulty invoice. Perhaps one of the biggest issues around claiming for travel lies in the blurred lines between travel for personal reasons and travel for business reasons.

Here at Blue dot, we came up with a few guidelines to help companies streamline their business trip VAT reclaim.

How? Well, you need to understand exactly what HMRC defines as business travel, maintain exceptional paperwork and travel logs, and ensure you can track, manage and control all your employee travel-related expenses clearly.

What are Travel Expenses?

Good question. According to the HMRC, the following items are defined as travel expenses within the remit of being able to reclaim on costs:

  • Methods of travel that include cars, buses, trains, planes and taxis or ride services such as Uber. Note that there is a different subset of regulations relating to public transport.
  • Accommodation
  • Meals and essential travel considerations such as parking fees
  • Communication costs such as mobile data and Wi-Fi

What Counts as Business Travel?

It is important to understand what constitutes business travel. Note, this is just a guideline but you should contact HMRC to ensure that any claims you make are approved by the tax authority.

  • You can potentially claim on VAT and tax for:
  • Travel that is not just commuting to work.
  • Sustenance that is not part of the daily commute or included in day rate packages.
  • Overnight stays and accommodation or food.

If all of these activities are undertaken by an employee while they are working for the company. These are not part of the daily working and commuting, but activities undertaken outside of the normal place of work.

Six Business Travel VAT Reclaim Guidelines

  1. Original Invoice Only

Make it a company rule to accept original invoices only. An invoice should have the word “invoice” clearly displayed on the top. Do not accept proforma invoices, copies, or credit card slips. Employees know to always request an original invoice and a VAT invoice.

  1. Correct Legal Names on Invoices

Make it a company policy to correctly display the legal name and address of the company. Often, companies have an improper name on their invoices – such as the name of a sub-group or department. These are not valid for VAT reclaim.

  1. Additional Invoice Requirements

For business trip expenses under EUR 150 for items such as public transportation, taxis, and restaurant bills, a simplified invoice with a VAT breakdown is acceptable. The VAT threshold for simplified invoices in Germany is EUR 250 (per Jan 1, 2017).

In cases of a multi-page invoice, ensure ALL pages are submitted.

Check that all the vendor details are included on the invoice, including the invoice number and invoice date.

Confirm that there is a VAT indication mentioned on the invoice.

  1. Special Requirements Per Country
  • Switzerland and Belgium – The company name is required on each invoice – even on an invoice from fast food eateries or public transportation. Ask the cashier to include it.
  • Portugal and Spain – The company name and VAT number are required on each invoice – even on an invoice from fast food eateries or public transportation. Ask the cashier to include it. The only exception is Portugal, where a company name is not required on invoices for parking and tolls.
  • Italy – The invoice must include the word “Fattura” and NOT “Recivuta” and must contain both the company name and the employee name. You must have proof of payment i.e. a credit card slip or an indication on the invoice that it was paid.
  • Germany – When charging items in a hotel bar to your room, please keep (and submit) the bar voucher as well.
  • Czech Republic, Romania, and Hungary – The invoice should be issued in the local currency. Amounts in Euros may also appear on the invoice for your convenience.
  1. Communicate Your Business Expense Policies

Now that you’ve gathered information and can formulate a solid business trip expenses policy for your company, create a file with those policies and meet with the department heads whose teams incur the most business trip expenses (often sales and customer success).

A good policy that no one knows about cannot be enforced. Communicate the rules of the game and set standards for an increase in compliance. Expect to speak one-on-one with people in order to change bad invoice habits.

Claiming VAT Back on Hotel Accommodation for Business Travel

You must keep accurate records of your transport to prove that your claim is valid and you must show that the time spent at the hotel by the employee was for business purposes, not for personal reasons. As hotels often charge VAT, this amount can be claimed back by the business. However, it is worth noting that if the booking is done through a platform such as, this can mean you don’t get a receipt which will prevent you from being able to claim back the VAT. If you want to claim this back, you should book with the hotel directly.

You will also only be able to claim the VAT if the hotel is based in the UK.

FAQs on Claiming Travel Expenses and VAT Reclaim for Business Trips

What Journeys Can I Claim Travelling Expenses For?

You can claim your travel expenses on all journeys undertaken on behalf of the business. However, you will need to assess how public transport fits into your claim as per the guidelines here. You also cannot claim on travel expenses undertaken as part of day-to-day business activities.

How Much Tax Back Can I Claim for Travel?

The amount of tax you can claim back on your business travel expenses will depend on how much VAT you paid and your eligible expenses. For example, you can claim a flat rate of 45p per mile up to 10,000 miles per year for business trips using a company or personal vehicle.

What If I Don’t Have Any Travel Expenses Records?

If you do not have any proof of purchase in the name of the company or in line with HMRC’s requirements then you cannot claim back on the travel expenses.

What Counts as a Workplace for Business Travel?

This is where your business is based for the majority of the time you do business.

What If My Employer Has Paid Me Travelling Expenses?

If you have been paid travelling expenses you cannot claim on VAT or the payment would be seen as part of your salary and would need to be taxed as such.

How Blue dot Enables Businesses to Automatically Increase VAT Reclaim

Are you seeking to optimize your process of claiming travel expenses and increase VAT reclaim, all while maintaining effortless compliance? Blue dot’s VATBox solution is the only true AI-driven VAT recovery solution, ensuring unprecedented data quality, precision and transparency for finance and tax departments. By leveraging VATBox’s deep learning capabilities and built-in tax compliance engine, leading global tire manufacturer Michelin to recover over €3 million euros in VAT refunds. Our system simplifies the VAT recovery process on travel and entertainment (T&E) expenses at scale, enhancing visibility and ensuring compliance for your cross-border businesses.

Learn more about digitalized compliance automation for modern employee spend

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