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HMRC internal manual

Employment Status Manual

HM Revenue & Customs
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Managed Service Companies (MSC): Application of the tax rules: travel expenses

Step Two of the deemed payment calculation allows a deduction for any expenses met by the worker which could have been claimed as expenses against income tax if the worker had been an employee of the client and had paid for them himself. This may include any travel expenses incurred in respect of relevant engagements. The legislation treats all engagements as being part of a single employment with the MSC, therefore the rules in respect of travel expenses should be applied on that basis.