Technically speaking, HMRC don’t make any stipulation as to the class of travel for it to be exempt from tax, only that it is wholly incurred in the course of business.

If you personally incur additional expense for upgrading business travel you can put it in the employment section of your self-assessment and claim back the tax at your marginal rate.

Having your employer pay for a ticket you bought yourself but then cancelled would be a big no-no I would have thought, however, even if you subsequently bought tickets on the same flight. It wouldn’t be difficult to check the name against the PNR and see that it had been cancelled.

DOI: IANAA but I spend a lot of time trying to push every boundary with mine!