Application of the tax rules: travel expenses - example
Mr C, an IT contractor provides his or her services through a limited company (which he owns) C Services Ltd. The company has a series of contracts under which his services are provided to different clients around the country. Mr C regularly travels from his home to work at the premises of the company’s clients. He meets the expenses of that travel personally.
Provided Mr C does not expect to spend more than 40% of his or her working time at any one site he is entitled to a deduction for all journeys from home to the client’s premises. If he does spend more than 40% of his time at a single site, but the engagement is both expected to, and actually does, last for no more than 2 years, a deduction for travel costs will also be available.
See EIM32000 onwards for further guidance on the application of the travel rules.