How Much Is the Average Construction Travel Budget? And How to Save…

Audrey Fairbrother
January 27, 2023
How Much Is the Average Construction Travel Budget? And How to Save…

Construction travel budgets vary depending on the location and the duration of a project. But there are a couple of hard and fast figures you can reference when projecting your team’s travel spend.

Construction Industry Scheme (CIS) workers

CIS workers can claim travel expenses (for mileage, travel, accommodation and subsistence) through HMRC — as long as they’re travelling to a temporary workplace.

A workplace is classified as temporary when a contract doesn’t exceed 24 months and when a worker doesn’t spend more than 40% of their time at this place of work.

But because CIS workers are responsible for reporting these expenses on their own tax return, it’s not something that employers have to consider.

PAYE employees

For PAYE employees, it’s worth looking at HMRC guidelines to predict your construction travel spend.

First up, your construction travel budget is affected by any mileage payments you expect to make. If an employee uses their own vehicle to travel to and from a temporary place of work, you can use the following HMRC mileage rates:

For the first 10,000 miles:

  • Cars & vans — 45p/mile
  • Motorbikes — 24p/mile
  • Bikes — 20p/mile
  • Miles after the first 10,000:
  • Cars & vans — 25p/mile
  • Motorbikes — 24p/mile
  • Bikes — 20p/mile

These rates haven’t changed in over a decade, but you can consult the UK government website to confirm them before you get started planning.

You may also want to cover employee subsistence costs when they travel — via standard expenses, a round sum allowance or per diem payments.

If you want to pay a per diem (also known as a scale rate payment) to your employee, government guidelines are — at the time of writing — as follows:

  • £5 for qualifying travel of 5 hours or more
  • £10 for qualifying travel of 10 hours or more
  • £25 for qualifying travel of 15 hours or more and where the travel is ongoing after 8 pm

You can pay an additional £10 per day if an employee is travelling for five or ten hours or more, and they’re still travelling at 8 pm.

You can make these payments tax-free — and can negotiate higher rates with HMRC if you can prove that your employees generally require a higher per diem budget.

And if your team is booked on overnight stays, you should be reimbursing them for the full cost of accommodation.

PwC predicts that in 2023, the average room rate for a hotel in London will be around £212.60 and £91.50 in the rest of the country.

UK Construction Workers

5 tips to make business travel more effective

These construction travel costs can quickly mount up, so it’s a good idea to examine your business travel strategy on a regular basis and work to make improvements — particularly when times are tough.

Here are a couple of ideas you can implement to make your travel budget go further.

Use a hotel booking engine designed for business travel

Did you know you could be saving a ton of money on hotel bookings by simply booking accommodation through the right platform?

Use Hotel Engine — a platform designed specifically for business travel — and you can search from over 700,000 hotels and save up 60% with their exclusive rates.

As well as helping you to get better deals, Hotel Engine provides reporting tools so you can keep track of your accommodation spend and better manage your travel budget.

And unlike other business travel platforms, Hotel Engine is completely free to use — with no contracts and no minimum spend requirement. So booking through the right platform really can make all the difference.

Have a business travel policy in place

A business travel policy sets out how employees should book travel, seek approval for travel and claim expenses.

By getting your policy down on paper (or in Hotel Engine) and sharing it with employees, you make clear the expectations around any travel budget limitations that your team needs to bear in mind when booking business travel.

This in turn helps make your process more efficient and prevents overspend.

UK Construction Project Site

Streamline your expenses

Make it as easy as possible for your employees to claim their expenses. That might mean using the HMRC’s recommended mileage or subsistence reimbursements so there’s minimal paperwork involved.

Alternatively, if you want your employees to claim travel expenses with receipts, then look at digitising and automating the process. Platforms like Hotel Engine can streamline your expense reconciliation with live access to hotel receipts and consolidated billing.

Encourage the use of public transport and ride-sharing

Make your travel budget go further (and do your bit for the environment) by encouraging your employees to find eco-conscious ways to travel.

Whenever multiple employees travel to the same place together, try to arrange ride-sharing so you don’t have to fork out multiple mileage payments.

If employees have to travel alone but don’t have lots of equipment to schlep along with them, suggest public transport options to save on fuel costs and reduce your firm’s carbon footprint.

Offer incentives for staying on-budget

You can offer incentives to employees for staying within their allocated travel budget. Think extra days off, gift cards or a team party.

When there’s a real motivation to keep travel spending down, you may find that employees are more conscious of how they use that company money.

Booking through Hotel Engine is a surefire way to make your travel budget go further. Sign up for a free account and start booking discounted business lodging today!

Article written by
Audrey Fairbrother

Audrey Fairbrother is the Content and SEO Manager at Hotel Engine. She spends her days writing about all things business travel, researching topics that are important to Hotel Engine's audience and cultivating the company's brand voice.

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