Drivers in the UK pay the highest percentage of tax on fuel anywhere in Europe, according to an article in the Telegraph; and the Independent recently confirmed that the UK also has the most expensive train travel in Europe.
The inescapable reality is that travel in the UK is very expensive; and that makes it more important than ever to know exactly how to minimise your business travel costs to avoid eating into your company profits. As an itinerant project manager, I have travelled the length and breadth of the country; and, as a Yorkshireman, it physically pains me to pay a penny more than I absolutely have to pay for anything.
In this article, I will share the tricks and tips that have saved me more than 4 figures in travel and accommodation over the last 12 months.
Trains, planes, and automobiles (and hired automobiles, and taxis, and bikes)
The car is the default option for many contractors in the UK, but don’t fall into the trap of thinking that you’re ‘making money’ on the AMAP (At Approved Mileage Allowance Payments) rates. 40p per mile might sound generous when you compare it against what you are spending on fuel but the real figure you need to keep an eye on is the lifetime per mile cost of running the car (Google: ‘this is money true cost of running a car’ for a tool to calculate the true figure; or, alternatively, the AA provide some generic figures for the UK Google: ‘AA car running costs’).
If you are retaining a 2nd car primarily for infrequent business travel, the chances are that you would be better of switching to a combination of trains, taxis, and hire cars. It is also worth noting that – even if you absolutely need to retain your car – if you need to do a long trip over a short space of time (say, 200-300 miles in a day or over a couple of days) there will be a break even point where it is cheaper to use a hire car instead of your own car for those couple of days.
If the true cost of running your 2nd car is 60p per mile, for example, and you are going to do a 220 mile journey over 2 days, the price to beat is £132. How much would it cost to hire a car for 2 days? £30 per day is average quote, so you might be pleasantly surprised when you do the figures.
As a side note, if you are concerned about the exorbitant damage excesses that hire car companies charge, then there are a range of specialist providers who will charge around £60 per year to cover all of your hire car damage excess in the event of an accident (Google: ‘car hire excess insurance’).
Community cars such as City Car Club can also be a useful short term option for business travel; the rates will generally be more than an equivalent hire car, and you will typically have to pay a membership fee upfront; but, on the plus side, you can collect and drop off 24 hours a day rather than being limited to 9-5, and you can book in half-hour increments, rather than full days.
Trains – and particularly long train journeys – are becoming more and more the preserve of the wealthy in the UK over time but it is still always worth comparing the door-to-door time and cost of the train with the car. National Rail is the definitive source of information for checking routes, times, and prices; but when you know where and when you want to travel, you should always double check the individual train company website to make sure that you are getting the best price (and avoiding any cheeky booking fees).
If you know in advance when you will need to travel, then a lesser known feature of thetrainline.com called Ticket Alert could save you a huge amount of money. You simply provide your name, e-mail address, journey, and dates, and you will receive a notification as soon as the advance discount rates are published. In a simple test, I was able to book a single from York to London Kings Cross for £9 approximately 12 weeks in advance compared to £97 booking exactly the same ticket on the day.
The other way to play the system is with ticket splitting, a concept popularised by Martin Lewis from Money Saving Expert. The concept is simple – due to the arcane nature of ticket prices in the UK, it can be cheaper to book your route in stages, rather than as a complete journey. It can also be cheaper to book two singles rather than one return (and I have even found, on occasion, that it is cheaper to book two day returns rather than two singles or one period return – ridiculous, but true). The good news is that you do not have to do the legwork yourself. The website Split Your Ticket can do the computations for you, and there is even an iPhone app (iTunes: Tickety Split).
If you are travelling for a morning meeting, it is also always worth considering travelling off-peak the evening before and stopping overnight at a budget hotel. In a simple test, a return from York to Birmingham travelling standard class at peak time was approximately £130; whereas I could buy a standard single the evening before for approximately £20, stay at a budget hotel for £30, and take an off-peak single the following afternoon after the meeting for approximately £40; an overall saving of £40, and I was much more alert for the meeting than I would have been if I had got up at 5am, too.
As a final thought, if you have a bike, then consider cycling on business – most people know about the cycle purchase scheme, which contractors can also take advantage of through their private limited company, but it is a lesser known fact that you can claim 20p per mile on the AMAP (At Approved Mileage Allowance Payments) rates for any business related cycling (with the added advantage that you will never have to pay for parking).
This article was written by Peter Roy
You can read Part 2 in this cost-cutting series; how to save on your accommodation costs – click here.