HMRC publish updated guidance on work travel

HMRC do not allow tax relief for ordinary commuting between an employee’s home and their normal place of work, any costs paid by the employer to reimburse such travel will be taxable income for the employee.

If the individual was using a company car for this travel, a taxable benefit in kind would arise which could be very expensive. In contrast for company vans, no taxable benefit in kind is deemed to arise for normal home to work commuting.

HMRC have recognised that an increased number of employees now opt to work from home during part of the week as part of a hybrid working arrangement, they have recently published guidance to clarify their position on how this impacts ordinary commuting.

If the employee has a base office that is available to them but for part of the week they choose to work from home on a voluntary basis, then no tax relief is available for travel from the home to the office. This is because the office is still deemed to be the permanent workplace through the week and the travel will be classed as ordinary commuting.

In contract, if the employee works at home for certain days of the week as a requirement (not on a voluntary basis) of their employment contract, then tax relief is available for travel between home and the office/permanent workplace. This would only be on days in the week where the employee’s home is required to be the workplace not on days they can work in the office.

The rules surrounding home to work travel and what is deemed to be a permanent/non-permanent workplace are very extensive.

Should you have any questions concerning the above, please call 023 8046 1237 or email Joe Wilson.