Expense management module › Global expense management › United Kingdom
Last updated : 11.05.2026
Expense rules in United Kingdom.
All HMRC rules: VAT rates, AMAP mileage rate, subsistence allowances and VAT65A procedure for VAT recovery. Updated from gov.uk.
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1Expense rules & reclaimable VAT
Standard 20% VAT rate, reclaim conditions and HMRC caps.
| Category | VAT | Reclaim | Cap / Note |
|---|---|---|---|
| Business meals (clients) | 20% | Not reclaimable | Entertaining not reclaimable (except overseas) |
| Employee subsistence | 20% | 100% reclaimable | Travel > 5h/10h, HMRC scale rates |
| Accommodation / hotel | 20% | 100% reclaimable | Invoice in company name |
| Business fuel | 20% | 100% reclaimable | Fuel scale charge if private use |
| Train / flight / public transport | 0% | N/A | Zero-rated |
| Taxi / Uber | 20% | 100% reclaimable | Receipt required |
| Client gifts | 20% | Limited | £50/recipient/year cap |
Subsistence > 5h
£5
HMRC scale rate cap for light meal.
Subsistence > 10h
£10
HMRC scale rate cap for fuller meal.
Retention
6 years
Receipts kept 6 years (HMRC VAT records).
2Mileage allowance (AMAP)
Approved Mileage Allowance Payments — tax and NIC-free rate.
| Mode | Allowance | Cap | Note |
|---|---|---|---|
| Car (first 10,000 mi) | £0.45/mi | 10,000 mi/year | Covers fuel + maintenance + insurance |
| Car (beyond 10,000 mi) | £0.25/mi | — | Above annual threshold |
| Motorcycle | £0.24/mi | Unlimited | AMAP motorcycle rate |
| Bicycle | £0.20/mi | Unlimited | Business trips only |
| Passenger (suppl.) | £0.05/mi | — | Per additional business passenger |
SourcesHMRC — AMAP Rates
3Per diem and travel allowances
HMRC subsistence allowances — scale rates or actual expenses.
| Destination | Meal | Lodging / night | Daily rate |
|---|---|---|---|
| UK — travel > 5h | £5 | — | — |
| UK — travel > 10h | £10 | — | — |
| UK — > 15h (+late finish) | £25 | — | — |
| London (central) | £25 | £175 | £200 |
| Manchester / Birmingham | £25 | £140 | £165 |
| Foreign — Paris | £60 | £200 | £260 |
| Foreign — New York | £75 | £300 | £375 |
4Foreign VAT recovery
UK company VAT recovery in EU (13th Directive post-Brexit) and reverse.
| Zone | Mechanism | Deadline | Method |
|---|---|---|---|
| European Union (27) | 13th Directive (reciprocity) | 30 Sept. N+1 | Direct filing per country |
| France | Full reciprocity | 30 Sept. N+1 | impots.gouv.fr — Cerfa 8801 |
| Germany | Full reciprocity | 30 June N+1 | BZSt — Form USt 1 TN |
| Switzerland | Reciprocity | 30 June N+1 | FTA Form 1222 |
| USA | No recovery | — | Sales tax not recoverable |
| UK VAT for foreign cos | VAT65A | 31 Dec. N+1 | HMRC VAT65A — paper or portal |
UK minimum
£35
Min. reclaimable VAT via VAT65A (annual).
EU minimum
€50
Min. annual 13th Directive.
Typical ROI
0.5–2%
% expenses recovered multi-country.
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AMAP mileage rate, HMRC scale rates, EU 13th Directive VAT recovery: all the rules above are natively integrated into Illizeo.
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