Why are my travel expenses marked as 'disallowable'?

Thanks for posting to the Community, @Raphy.

Let me share some information about the categories that are showing under travel expenses. 

QuickBooks Self-Employed uses the Simplified Expenses (with flat rates) method to calculate the allowable business expenses for your car, van, or motorcycle. The rate will depend on the mileage you drive.

Using this method, you're unable to claim vehicle insurance, repairs, and servicing, or fuel costs. You can declare all other travel expenses in addition to your simplified expense amount. 

You'll categorize a transaction as travel expense when it's your train, bus, air, and taxi fares, as well as lodging and food costs while traveling overnight. Then, car/van expense if it's vehicle expenses like insurance, repairs, servicing, fuel, and parking. For more information, review this article: About Car, Van, and Travel Expenses.

The expenses that can be tagged as allowable are deducted from your taxable profit under the SA103F categories. However, disallowable expenses are transactions that can't be deducted from your business income. For more details, you can check out these helpful articles:

• About SA103F Categories
• Expenses if you're self-employed

You can also consult your accountant if you need professional advice in categorising transactions.

Feel free to post a comment below if you have more questions. I'll be around to help. Stay safe and well!

Hi @Jovychris_A ,

Thank you for the copy and paste response that I could have found on many other threads. Unfortunately, it doesn't address my questions even a little bit. 

You said:

"You'll categorize a transaction as travel expense when it's your train, bus, air, and taxi fares, as well as lodging and food costs while traveling overnight."

I know this, and have specified in my question that I have correctly categorised my transactions as 'Travel Expense'. 

Now answer my question: why is this showing up as disallowable? 

Thanks for your prompt response, @Raphy.

It's because QuickBooks Self-Employed (QBSE) uses the simplified expense method that I posted a while ago. You may check and ensure to tag these transactions as a Business type expense so that you can successfully show it as an allowable cost.

If this is already tag and categorise that way, I'd recommend reaching to our chat support for QBSE. They have tools to help review the expense entries. They can also investigate this further via screen share and part the best fixes.

Here's how to contact them:

1. Click Help in the upper-right hand corner.
2. Click Contact Us. 
3. Fill in Ask a question, then select Continue.
4. Select Chat.

Please let me know or share us if you need further assistance. I'm always here to help. Take care!

Your help scheme access doesn't work if you are UK based as I get into a perpetual loop leading me to the US site - hopeless when I have a UK tax question about disallowed travel expenses

Christine

Hi Christine, What is your question about disallowed travel expenses? We can help here:smiling_face_with_smiling_eyes:

What was the solution to this problem as I have the same issues?

Hello there, @aimiecaff. 

Thanks for following this thread. In QuickBooks Self-Employed (QBSE), the expenses are reported based on the category assigned to each transaction. 

To ensure that the expense will be marked as allowable, I'd suggest reviewing and updating the categories of your travel expenses. 

You can also check out these articles to see the list of allowable expenses:

• Self-employed business expenses: all you need to know.
• Allowable and Disallowable Expenses
• About car, van, and travel expenses.

Post some more of your QBSE expenses concerns again if you need further help. I'll be more than happy to help you out. 

I’m having the same issue. I don’t understand why some are allowed and others are disallows. They are the same type of transaction from the same place. 

I'd like to share details why some of the transactions are considered disallowable, jenny888.

Allowable expenses are transactions that are important in running your business and can be deducted from your taxable income to reduce your Income Tax liability. Allowable expenses do not include money taken from your business to pay for personal purchases. In short, allowable expenses are eligible for tax relief.

Some of the examples are expenses for car/van insurance, repairs, servicing, fuel, parking, hire charges, vehicle license fees, AA/RAC membership, train/bus/air/taxi fares, and hotel/meal costs on overnight business trips.

On the other hand, disallowable expense are those that are not “wholly and exclusively” used for business purposes. They can't be used as a deduction to reduce your taxable income.

Additional details about this and a list of allowable expenses are discussed here: Allowable and Disallowable Expenses Explained.

If some of the transactions are marked as disallowable expenses even if they are the same with the allowance ones, I would recommend reaching out to our QBSE Support Team. They can take a look at the transactions and check why not all of them are tagged as allowable. Go to this article to get their contact details: Contact QuickBooks Self-Employed Support.

Don't hesitate to reply to me if you still have more questions about your expenses. Please know that the Community is always here if you need anything else.

Did you find an answer?

Hello there, @Cheshire wallworks.

I can help answer any questions you may have about QuickBooks. However, I have to gather some information about your concern to ensure I can provide the best solution.

Are you having the same concern as the original poster/customer? If so, my colleagues above have already provided the answers you need. If you're referring to something else, please share further details below.

I'm looking forward to your reply, @Cheshire wallworks. Thank you in advance, and have a great day.

I am having the same issue. The answers provided do not address the issue at all, they do not even explain why travel expenses might be showing as "disallowable" - according to the answers provided, they ARE allowable, so why are they not going through as such? I use the simplified expenses method for my taxes - according to HMRC, and to the various "experts" here at QuickBooks, travel expenses such as train tickets and hotel/AirBnB payments are ALLOWABLE expenses. We want to know why they are showing up as DISALLOWABLE in our QB

Hi there, @Joanna. I want to ensure this will be taken care of. 

A disallowable expense is a cost that is not used for business purposes. It also includes the item for personal use which appears on the same receipt as a business expense.

QBSE is compliant to the SA103F deduction categories for claiming allowable expense. The system tagged the transaction allowable or not, based on how you enter your data in the Tax Profile. For more details, you can check out this helpful article: About SA103F Categories. 

To correctly categorised your travel expenses, I'd recommend reaching out to your accountant. This way, they can verify if the assigned categories are under allowable expense and to confirm if they are compliant to the HMRC requirements regarding expenses if you're self-employed.

To learn more, feel free to read this page: Allowable and disallowable expenses explained.

I'll be here if you have any other concerns about managing your expense transactions in QuickBooks. Have a good one and stay safe. 

It feels like no-one is actually reading the questions we are posting about the issue. We are putting through the travel expenses under business, because they are. The costs entered are for business purposes. We are not mistakenly entering expenses that are not wholly for business purposes. It is QuickBooks that is erroneously marking them as disallowable expenses, and we want to know why, and how we can correct this. This should be answerable by QuickBooks as it is entirely the QuickBooks system that is categorising them as disallowable, for no assistant reason. We should not have to ask our accountants how to enter things in QuickBooks, they are there to enter things correctly into HMRC, not to correct your software categorisation (and in any case, I do not currently have an accountant). PLEASE stop copy pasting stock responses and articles, and actually look into our issue

To be absolutely clear, I am very well-versed in what constitutes allowable travel expenses for tax purposes in my business. These are allowable expenses. It is QuickBooks that has for some reason automatically categorised them as disallowable

@Joanna_A What was the out come. Having the same problem. Fine last tax year but this year all travel expenses are being put with the car expenses meaning disallowed……

Hi Richard 101, thanks for joining this thread - is the information in your tax profile for the current year complete, and have you auto-tracked (or entered manually) any trips in the Mileage section? 

No trips in the mileage section not even set up, I have done exactly the same as last tax year. Infact I only started using QuickBooks last year so did 2021-22 and 2022-23 tax years at the same time. So don’t get why. 

When I did my tax return in December all my travel expenses where allowed for 2021-22 and 2022-23, since then you have update and changed thee program and now they are disallowed, even if I go back to my 2021-22 they are now not allowed, 

Hello, @Richard 101. We recognize how infuriating it can be when things don't work as expected.

To resolve this matter effectively, we recommend contacting our Customer Care Support team. They can investigate this matter further and determine why your travel expenses are disallowed. They can also raise a ticket with our engineering team if necessary.

Here's how:

1. Select Assistant from the top bar.
2. Type in "Talk to a human," then press Enter.
3. Enter a short description of your concern. You can type in the investigation number here.
4. Select Message an agent or Get a callback.

Additionally, you can find more information about allowable expenses in these articles:

• About car, van, and travel expenses
• About SA103F Categories

I appreciate your patience as we work through this. We hope to have more information for you soon. If you have any other concerns, please don't hesitate to drop a comment below. Take care.

Wow, this thread was not helpful at all. I'm going to have to leave Quickbooks because I'm also having this issue. Quickbooks isn't helpful if you can't even categorise your expenses because it incorrectly deems them as "disallowed". 

Hi SarahKoko, thanks for joining this thread

The Travel expenses category is currently working as designed in QuickBooks Self-Employed.

If you don't use the pence/mile (simplified expenses) method, then you would categorise everything relating to your vehicle expenses in QuickBooks as Travel expenses (allowable).

If you're using the pence/mile method (by auto-tracking or entering miles on the Miles tab) then you would categorise all other vehicle-related expenses as Car/van expenses (disallowable). 

If you have any questions on this, get back to us below!