Home to work travel
In a consultation paper entitled Employment Intermediaries: Temporary workers – relief for travel and subsistence expenses HMRC set out options for restricting the availability of tax relief for home-to-work travel of certain temporary workers. The two main options are:
to specify that where an individual is supplied through a third party (including employment agencies, umbrella company and personal service companies), the workplace of the end client would in all cases be a “permanent workplace”; or
to stop treating overarching contracts of employment as giving rise to a series of temporary “employments” under a permanent contract for tax purposes.
Option 1 would remove the ability of contractors who work through personal services companies to claim travel expenses from their home offices to their end client. This could make it uneconomic for the contractor to work through a personal service company.
Option 2 would remove the tax advantage of over-arching contracts employment contract used by some employment businesses and umbrella companies to employ temporary workers on multiple separate work placements. Under those contracts the employer’s premises are treated as the permanent base location, this enables individuals to access tax relief on travel and subsistence costs.
Comments for this paper closed on 10 February 2015. It is unclear when or if legislation will be changed to implement the outcome of this consultation.