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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Employment income: travelling and subsistence payments: home to work travel of disabled persons

Section 246 ITEPA 2003

There is no tax charge when a disabled employee is provided with the means of travelling between home and work, or has the cost of their home to work travel paid for or reimbursed.

For 2002/03 and earlier years, exemption was provided by Extra-Statutory Concession A59 (see SE10080).

For 2003/04 onwards, the former concession has been replaced by a statutory exemption in Section 246 ITEPA 2003.

Section 246 does not apply to the provision of a car, but there is a separate exemption which applies when an employer provides a disabled employee with a car for home to work travel (see EIM23660 onwards).

For the purpose of the exemption in Section 246, “disabled employee” means an employee who has a physical or mental impairment that has a substantial and long-term adverse effect on the employee’s ability to carry out normal day to day activities (Section 246(4)).

This definition of “disabled employee” draws on the definition of disabled person” now given by the Equality Act 2010 (previously contained in the Disability Discrimination Act 1995). However, when considering whether the exemption applies you must focus on the section 246 definition rather than the more detailed Equality Act legislation which is concerned with the prevention of discrimination against somebody on account of their disability.

There are circumstances in which an employee will not qualify for tax exemption under section 246, although that employee may be within the meaning of “disabled person” for the purposes of the Equality Act, which may then apply to prevent discrimination against that person. Circumstances that do not qualify for tax exemption include, for example, where the employee:

  • has a potentially recurring disability that is currently in remission such that the impairment ceases to have a substantial adverse effect.
  • previously had a disability as defined by the Equality Act but has since recovered
  • has an impairment and may be receiving medical or other treatment which alleviates or removes the effects (though not the impairment).

An employee who is able to carry out normal day-to-day activities at the time an employer is providing the employee with the means of travelling between home and work, or is reimbursing the cost of their home to work travel will not meet the terms of the section 246 definition.

As regards expenses claims by disabled persons who do not receive payments in respect of travelling expenses, see EIM32356.