Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Employment Status Manual

Employment intermediaries travel expense provisions: examples of the application of the employment intermediaries travel expense provisions

Example 1

Jim lives in Brighton and is employed through an umbrella company under an overarching contract of employment.

His umbrella company arranges work for Jim at Crawley for 3 months in X Ltd’s warehouse, then in Portsmouth for a further 3 months for Y Ltd and then finally for Z Ltd at Eastbourne for 1 month. X, Y and Z Ltd are not connected companies. At all 3 locations, he works under arrangements similar to an employee and is told what to do by the managers at each workplace.  He is reimbursed for travel and subsistence costs from home to all 3 destinations (Crawley, Portsmouth and Eastbourne).

Jim is under the direction of the client at each workplace and isn’t entitled to tax or NICs relief for any of these journeys. The employment intermediaries travel expense provisions apply which means that each of these 3 locations would be treated as a separate employment and so all 3 locations would be classed as permanent workplaces. The payments Jim receives for travel expenses are treated as his earnings for tax and NICs purposes.

Example 2

As in example 1, Jim is employed under an overarching contract of employment by the umbrella company under arrangements when he would be an employee of the client if engaged directly.

During the 3 months Jim is working in Crawley at X Ltd’s warehouse he is asked to spend 3 days working at X Ltd’s other warehouse in Shoreham.

He isn’t entitled to relief for travel and subsistence in respect of travel to and from Crawley, but is entitled to a deduction under ITEPA section 338 for his travel and subsistence costs to Shoreham, as this is travel to a temporary workplace and is not a new engagement. There’s also a disregard for NICs purposes for his travel and subsistence costs to go to Shoreham.

Example 3

As in example 1, for the 3 months Jim spends working in Portsmouth he decides to travel to the warehouse on Monday morning and stay in a bed and breakfast from Monday night to Thursday night before travelling back to Brighton on Friday afternoon.

As the workplace in Portsmouth is a permanent workplace under ITEPA section 339A, Jim is not entitled to a deduction for any of his travel and subsistence costs for tax and there is no disregard for NICs.

Example 4

Paula is a graphic designer and supplies her services through an employment intermediary. She lives in Bradford and works on various assignments, spending one week in York, 2 months in Glasgow, one week in London and 2 months in Exeter.

Paula works under arrangements that are properly seen as being like those of a self-employed person.

The employment intermediaries travel expense provisions don’t apply and she continues to be entitled to tax and NICs relief on reimbursed expenses for travel and subsistence costs from home to all of these locations.