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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: working rule agreements (WRA): daily travel payments

Information regarding daily travel payments can be found at EIM71306.

There are two elements to daily travel payments:

  • payment in respect of travelling time (often called a travel allowance)
  • payment towards the cost of travel (variously described as fares allowance, travelling allowance or radius allowance).

A Payment for travelling time should always be subject to tax and NICs.

Payment towards the cost of travel can take two forms

  • the reimbursement of fares incurred or
  • a fares allowance based on mileage (measurement is taken from a WRA defined centre to the site and the tax/NIC aspects will have been considered)

To maintain the principle that tax/NIC is due on home to work fares most WRAs specify that any payment for an initial threshold distance (for example, 4 miles in each direction of a return journey) is liable to deduction of tax and NICs, whilst the balance is not liable to deduction.

Generally the two elements of daily travel payments are shown separately in WRA tables