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HMRC internal manual

Employment Status Manual

Application of the tax rules: travel expenses - example

For 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.