The HMRC makes a distinction between travel ON the job and travel TO the job. In all cases, ensure the travel is not private travel or ordinary commuting. NOTE that deductions are NOT allowed for travel between home and a permanent workplace OR between a workplace and a non-workplace OR between separate (ie non-associated) employers’ workplaces. Deductions are NOT allowed for trips between the above places at any time even if required to work outside normal working hours eg on public holidays or weekends.
This post attempts to clarify the fundamental principles of travel expenses including the implications of having multiple workplaces, the 24-month rule relating to temporary workplaces, the fixed appointment issue, and what a permanent workplace is.
Examples 1 – 6 cover basic treatments of the following:
A. Travel in the performance of the employee’s duties
B. Travel to a place where attendance is in the performance of duties
C. Travel between employments where the employments are with linked employers or where one employment is wholly or partly based overseas.
D. Travel between separate employers within a group or between associated companies
Examples 7 – 11 help with temporary workplaces issues involving tasks of limited duration and attendances for temporary purposes.
Examples 12 -22 cover the implications of the 24-month rule (Continous work constituting 40% or more of working time AND lasting OR expected to last up to 24 months in a temporary workplace).
Examples 23 – 24 clarify the Fixed Term Appointment rule. NOTE that unlike the 24-month rule, travel expenses are not allowed if work constitutes 40% or more of working time AND the appointment is 80% or more of the duration of the employment.
Examples 25 and 26 provide some guidance for those required to show up at a base prior to work allocation.
EXAMPLE 1
Amanda is a senior manager in a sales consultancy company. She manages teams in offices in Leicester and Nottingham and is regularly required to travel between the two. Tax relief is available for the full cost of the travel between the 2 workplaces because it is undertaken in the performance of Amanda’s duties. No relief is available for travel from her home to the offices or her return home from the offices as this is ordinary commuting.
EXAMPLE 2
Tony is a service engineer working for a company that services and maintains white goods for the commercial sector. He visits up to 10 customers each day throughout the UK. He has no normal workplace and is emailed his job list each evening for the following day. Travel is an integral part of his job and he carries out the duties of his employment at each customer’s premises. Tax relief is available for the cost of all Tony’s business travel, including from his home to his first appointment and from his last appointment to his home.
EXAMPLE 3
Belinda is a purchaser for a major retailing company. Although she has a permanent workplace in Doncaster, she has to spend several days each month visiting suppliers all over the country, often travelling directly to and from home. Tax relief is available for the full cost of her business travel to suppliers, but not for her travel to her permanent workplace in Doncaster because that is ordinary commuting.
EXAMPLE 4
Ahmed has 2 separate employments. Each morning he travels from his home in Shepherd’s Bush to his job as a shop assistant in Central London. Each evening he travels directly from that workplace to Fulham where he works in a bar. He travels home to Shepherd’s Bush at the end of the day. There is no tax relief available for the cost of Ahmed’s travel to and from or between his 2 jobs.
EXAMPLE 5
Elaine is an employee of company A. She is also an employee of companies B and C. Company A has a 51% holding in company B and a 51% holding in company C. Tax relief is available for the cost of Elaine’s travel between various workplaces for the performance of the duties of the 3 employments.
EXAMPLE 6
Bricks Inc and Mortar Inc work together on a project to build a new industrial development. They operate through a company Project Inc (set up solely for this purpose)in which they each have a 50% holding. Claire is responsible for managing the project. At all times she remains and acts as an employee of Bricks Inc. Project Inc pays Bricks Inc for Claire’s services. Claire is entitled to tax relief for the cost of her travel between Bricks Inc and Project Inc and between either of these companies and Mortar Inc – not because they are members of a group (they are not), but because she is travelling in the performance of the duties of her employment with Bricks Inc.
EXAMPLE 7
Dinesh is a non-executive director for a large banking group. The main duty of his role is to attend monthly board meetings which he travels to directly from his home. The board meetings are all held at the banking groups headquarters in London. As all or almost all of the time that Dinesh spends working for that employer is spent at a single workplace it is a permanent workplace and no relief for his travel expenses is due.
EXAMPLE 8
Fred is a safety officer at his employer’s Nottingham office. He visits the employer’s Derby factory every week to carry out a particular safety check. His responsibility for that factory has been a duty of his employment for a period already spanning 20 years (so it is not of limited duration). However, the tasks he performs on each visit are self-contained and the purpose of each visit, considered alone, is temporary. Fred is entitled to tax relief for the full cost of his travel.
EXAMPLE 9
Gail is the finance director of a large company based in Scunthorpe. Once a month her duties take her to the company’s production unit in the South East. Her visits are to consider individual investment proposals but she takes the opportunity to discuss local welfare issues as a representative of senior management. The purpose of the visits is not linked, each one is self-contained. So the production unit is not Gail’s permanent workplace and she is entitled to tax relief for the full cost of her business travel.
EXAMPLE 10
Peter lives in Wolverhampton and has a permanent workplace in Birmingham. He is a director of a company which has a number of regional offices.
He has to attend a directors’ meeting each Friday in Stafford. Although the directors’meetings are regularly held in the same place, Stafford does not become a permanent workplace for Peter because each visit is for a temporary purpose. So he is entitled to tax relief for the cost of his travel from home to Stafford.
EXAMPLE 11
Gemma is employed as a school teacher in Oswestry which is a permanent workplace. Every fortnight she goes to an education authority meeting in Bridgnorth. She is entitled to tax relief for her travel from home to Bridgnorth because while she goes there regularly each visit is for a temporary purpose.
EXAMPLE 12
Chris has worked for 5 years at her employer’s head office in Warrington. She is sent by her employer to perform duties at a branch office in Wigan for 18 months, after which she expects to return to work in Warrington. As Chris’ attendance at the temporary workplace in Wigan is expected to last less than 24 months, tax relief is available for the full cost of her travel between home and the temporary workplace.
EXAMPLE 13
Duncan has worked for his employer in Sheffield for 10 years and is sent to help out at the employer’s Rotherham branch for 28 months. There is no tax relief for the cost of travel to and from the workplace. This is because he will be spending more than 40% of his working time there and his attendance is known from the outset to be for more than 24 months so the workplace is a permanent workplace. His home to work travel is therefore ordinary commuting for which no relief is available.
EXAMPLE 14
Hassan has worked for his employer for 3 years and is sent to perform full-time duties at a workplace for 28 months. The posting is unexpectedly ended after 18 months. No tax relief is available for the cost of travel between his home and the workplace, because his attendance is expected to exceed 24 months (though in fact it does not). The workplace is therefore a permanent workplace and the journey is ordinary commuting.
EXAMPLE 15
Richard has worked for his employer for 3 years. He is sent to perform full-time duties at a workplace for 18 months. After 10 months the posting is extended to 28 months. Tax relief is available for the full cost of travel to and from the workplace during the first 10 months (while his attendance is expected to be for less than 24 months), but not after that (once his attendance is expected to exceed 24 months).
EXAMPLE 16
Sarah has worked for her employer for 7 years and is sent to perform full-time duties at a workplace for 28 months. After 10 months the posting is shortened to 18 months. No tax relief is available for the cost of travel to and from the workplace during the first 10 months (while her attendance is expected to exceed 24 months), but tax relief is available for the full cost of travel during the final 8 months (once her attendance is no longer expected to exceed 24 months.
EXAMPLE 17
Edward lives and works in Portsmouth where he is employed as an engineer. His employer sends him to work in Southampton for 1.5 days a week for 28 months. For the rest of the week he continues to work in Portsmouth which remains a permanent workplace. In considering whether Edward is entitled to tax relief for travel between home and Southampton it is important to look at the amount of time he expects to spend there each week and for how long he expects to be in Southampton. Because he expects to be in Southampton, for less than 40% of his working time, albeit over a period longer than 24 months, and he retains a permanent workplace in Portsmouth, Southampton is a temporary workplace for Edward and he is entitled to tax relief for the cost of getting there and back.
EXAMPLE 18
Caroline is employed as a laboratory assistant. She lives in Newport and works in Cardiff. Her employer opens a new laboratory in Swansea. Caroline is sent to work there 4 days a week and expects to be there for 30 months. She is not entitled to tax relief for travel from home to Swansea because she is spending more than 40% of her time at the new laboratory and expects to be there for more than 24 months. It is therefore a permanent workplace. Caroline is not entitled to tax relief for travel from home to Cardiff for the one day a week she goes there because her attendance there is not to perform a task of limited duration or for a temporary purpose. The Cardiff laboratory remains a permanent workplace.
EXAMPLE 19
Steven is employed as a financial adviser working in Brighton. His employer sends him to an office in Bournemouth for one day a week over a 10-month period. He travels to Bournemouth directly from his home in Hastings. Steven is entitled to tax relief for his travel to Bournemouth because he has gone there for a temporary purpose. He does not expect to spend more than 40% of his time there nor does he expect to be going there for more than 24 months.
EXAMPLE 20
Neil is employed as a speech therapist at a hospital in Leeds. His employer sends him to Bradford for 3 days a week to supervise a new department there.He expects to be in Bradford for 18 months. Neil is entitled to tax relief for his travel from home to Bradford. Although he is spending more than 40% of his time in Bradford he does not expect to be there for more than 24 months so Bradford is a temporary workplace.
EXAMPLE 21
Alan lives in Tewkesbury and has a part-time job working 2 days a week in Cheltenham as a telephonist for an insurance company. He is asked to spend one of his 2 working days covering for a colleague at a branch in Gloucester for a period of 32 months. Alan is not entitled to tax relief for travel between home and Gloucester because, while he spends only one day a week in Gloucester, this is more than 40% of his working time and he expects to be there for more than 24 months. Alan is not entitled to tax relief for the journey he makes between home and Cheltenham on the other day he works because Cheltenham remains a permanent workplace.
EXAMPLE 22
Susan is employed as a human resources consultant. She expects to spend all her working time at a client’s site for 23 months. She works full-time at the client’s site for 17 months developing a new staff appraisal system and then deals with unexpected priority work elsewhere for 3 months. She then returns to the client’s site for a further 6 months to co-ordinate the roll-out of the new system. Susan is entitled to tax relief for her travel from home to the site during the first 17 months because she does not during that time expect to be at the site for more than 24 months. She is not, however, entitled to tax relief for her travel from home to the client’s site for the further 6 months. That is because she now expects to spend 23 out of the 26 months at that site, which will be more than 40% of her working time over a period longer than 24 months.
EXAMPLE 23
Mike is taken on for a fixed-term employment of 18 months to work at a particular site. No tax relief is available for the cost of travel to and from the site during that period.
EXAMPLE 24
Laura is employed as a research scientist on a fixed-term contract lasting 15 months. Most of her work is to be done in research laboratories in Upminster but to familiarise her with equipment which is new to her, her employer first sends her to the manufacturer’s premises in Inverness. Laura is entitled to tax relief for her travel to and from Inverness, but not for her travel from home to and from Upminster because it is the place where she will carry out duties for almost all of her employment.
EXAMPLE 25
Matthew is employed as an electrician. Each morning he visits a depot where he is given his job list for the day. His employer usually contacts him during the day to make changes to that job list. He is therefore, allocated tasks in many different places. However, Matthew’s depot is still the place he attends regularly where he is routinely allocated tasks and it is, therefore, his permanent workplace. So, travel between his home and the depot is ordinary commuting for which no tax relief is available. Matthew will still be able to claim tax relief for his business travel.
EXAMPLE 26
Jill is employed as a plumber. She has no permanent workplace and can work on more than 100 sites in any one year. She receives instructions about where to work over the phone. She calls into her employer’s premises most Wednesdays to collect piping and replacement tools. Calls of this type do not make the employer’s premises into a depot or other permanent workplace. Jill can claim tax relief for all her journeys.
[Ref: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/517266/490.pdf%5D
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