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HMRC internal manual

Employment Income Manual

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Particular benefits: late night taxis: second condition: irregular occasions

Section 248(2) (b) ITEPA 2003

In certain circumstances there is an exemption from the benefit in kind charge that would otherwise arise where an employer provides a late night taxi for an employee to travel home from work (see EIM21831).

The exemption can apply only where the four late night working conditions are satisfied (EIM21831), and is limited to the first 60 such journeys in a year. The first late night working condition is explained in EIM21832. If this condition is satisfied, the second condition, which is explained in more detail below, is that the occasions concerned occur irregularly. If the second condition is also satisfied, see EIM21834 for more information on the third condition.

The meaning of irregularly

The second of the late night working conditions requires that the occasions on which an employee works later than usual and until at least 9pm occur irregularly. Irregularly means not following usual or established custom. Consequently a late night taxi provided to take home an employee who is required to work late every Friday would not qualify for exemption as this is an established and regular pattern of working. Even if the day of the week varies, if it is part of an employee’s terms and conditions that he or she is required to work late one night per week and on these occasions is provided with a taxi for the journey home, this would still be a regular occurrence .

For the provision of a late night taxi home to be irregular, the journey must be a consequence of a requirement to work late that is different from the employee’s established pattern of working. For example, a late night taxi provided for a few days in order to enable the employee to work late to deliver a particular project is provided irregularly, if, looking at the employee’s usual or ordinary working pattern over theyear, he or she is rarely if ever required to work late .

The 60 day limit on journeys qualifying for exemption is not relevant in deciding whether or not a particular journey home is regular.

Examples

  1. An employee who normally works from 9am to 5pm is required by his employer to work until at least 9pm on the last but one working day of each month in order to ensure that the employer’s payroll operates correctly to pay all employees on the last working day of the month. On these 12 occasions each year the employer provides a late night taxi to take the employee home.

The 12 occasions on which the employee is required to work later than usual and until at least 9pm are a regular part of the person’s employment. The exemption in s248 does not apply.

  1. An employee who normally works no later than 6pm, is required to work until at least 9pm for a couple of nights in a week in order to finish a particular job which has caused considerable and unforeseen problems for his employer. On these nights the employer provides a late night taxi to take the employee home.

On these occasions the employee works later than usual and until at least 9pm. Whilst he is provided with a taxi on a couple of occasions in the week concerned, this arises out of a particular set of circumstances and we would not regard it as a regular occurrence. In this situation, provided there is nothing to suggest that it was likely to become an ongoing event, we would accept that the second late night working condition is satisfied. If, however, this pattern of working became a regular part of the person’s employment, the exemption would cease to apply.

  1. An employee is contractually required to work from 9am to 6pm but is often required to work until 8pm and occasionally to work until 10pm if a “rush” job has to be completed. If he or she works until 10pm the employer provides a late night taxi home .

Although contracted to work until 6pm, the employee regularly works until 8pm. But he or she does not work regularly until 10pm. As the requirement to work until 10pm occurs on irregular occasions only, the second of the late night working conditions is satisfied.

Other late night working conditions

If an employee provided with a late night taxi from work to home satisfies the requirements that he or she works later than usual and until at least 9pm (EIM21832), and only on occasions which occur irregularly, for the exemption under s248 to apply the third late night working condition must also be satisfied – see EIM21834.