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HMRC internal manual

Employment Status Manual

HM Revenue & Customs
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Employment intermediaries travel expense provisions: effect of the provisions and definitions

Income Tax (Earnings and Pensions) Act 2003 (ITEPA), Part 5, Chapter 2, sections 337 to 339A

Social Security (Contributions) Regulations 2001, Schedule 3, Part 8, paragraphs 3, 3ZA & 3ZB

From 6 April 2016, when the employment intermediaries travel expense provisions apply, each engagement undertaken will be considered a separate employment for the purposes of travel and subsistence.

The effect of the changes is that the travel and subsistence expense rules will apply in the same way to intermediaries falling within the new rules as they would if the worker was engaged directly. It’s therefore likely that each workplace a worker attends will fall within the definition of a permanent workplace and travel to that workplace, from home (or a place that is not a workplace) would be considered ordinary commuting for the purposes of section 338 of ITEPA. Any payment for the cost of this travel would therefore be subject to tax. In addition, the NICs disregard for travelling expenses at paragraphs 3, 3ZA and 3ZB of Part 8 of Schedule 3 to the Social Security (Contributions) Regulations 2001 won’t apply.

For tax - there is no tax relief on travel and subsistence expenses for ordinary commuting which is travel between home (or a place that is not a workplace) and a permanent workplace.

For NICs - the NICs treatment of travel and subsistence expenses mirrors the tax position, so that there’s no NICs disregard for any reimbursed expenses in respect of travel and subsistence incurred on journeys from home to a permanent workplace.


In the context of the employment intermediaries travel expense provisions:

Arrangements - includes any scheme, transaction or series of transactions, agreement or understanding, whether or not enforceable, and any associated operations.

Employment intermediary - means a person, other than the worker or the client, who carries on a business (whether or not with a view to profit and whether or not in conjunction with any other business) of supplying labour.

Engagement - means any such provision of service as is mentioned in ITEPA, section 339A(1)(a) (ie where an individual (the worker) personally provides services (which are not excluded services) to another person (the client)).

Excluded services - means services provided wholly in the client’s home.

Managed service company - means a company which is an MSC within the meaning given by section 61B ITEPA, or would be such a company disregarding subsection (1)(c) of that section.

Further information

Guidance on when the employment intermediaries travel expense provisions apply - [ESM5530] onwards.

Employment intermediaries within the scope of the MSC legislation - [ESM5570].

Modification relating to employment intermediaries within the scope of the Intermediaries legislation - [ESM5580].

The position for workers engaged through employment intermediaries before 6 April 2016 - [ESM5680].

Further information on the treatment of travel and subsistence expenses:

  • tax - Employment Income manual [EIM31800]
  • National Insurance contributions - National Insurance manual [NIM06250]