The latest on home-to-work travel
Homeworking. Tax experts have been saying for years that HMRC’s guidance on tax relief for travel costs needed updating to cover the situation where employees (including directors) have two or more permanent workplaces, one of which is their home. HMRC’s updated guide to tax and travel costs (Booklet 490) does this.
Ordinary commuting. Travel costs are not tax deductible if they are for ordinary commuting between home and a permanent workplace, usually that’s your employer’s premises. However, these days it’s common for many employees to have two permanent places of work, their home and their employer’s premises. This raises the question of whether a tax deduction can be claimed for the cost of travelling between them.
Tip. Costs of travelling from home (whether or not it’s a workplace) and a temporary place of work, e.g. a customer’s premises, are tax deductible.
Latest guidance. HMRC’s revised guidance says that where your home is a workplace then in some circumstances tax relief for travel costs for journeys to and from another workplace might be tax deductible. The key factor is whether you’re “required” by your employer to work at home or whether you do so at your request. The courts have considered home-to-work travel costs many times but the position remains notoriously tricky. It would therefore be unfair of us to criticise HMRC’s approach. However, it’s simple to put the matter beyond doubt.
Tip. If an employer agrees to an employee’s request to work at home some of the time, making it a contractual requirement will clarify the tax relief position. If the employee has to travel between home and the employer’s premises when they would be expecting to work at home, they can claim a tax deduction for the cost of that travel (see The next step ).
For more information on tax relief for travel costs including a link to HMRC’s Booklet 490, visit https://www.tips-and-advice.co.uk , Download Zone, year 24 issue 15.
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