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HMRC internal manual

Employment Status Manual

Employment intermediaries travel expense provisions: the position for workers engaged through employment intermediaries before 6 April 2016

Income Tax (Earnings and Pensions) Act sections 337 to 342 (as in force before 6 April 2016)

Social Security (Contributions) Regulations 2001, Schedule 3, Part 8, paragraph 3 (as in force before 6 April 2016)

A deduction from earnings in respect of travel expenses isn’t available for ordinary commuting which is travel between home (or a place that isn’t a workplace) and a ‘permanent’ workplace. A deduction is generally available for travel in the performance of a worker’s duties or for travel between a worker’s home and a ‘temporary workplace’.

There are a number of criteria for determining whether a workplace is temporary or permanent, but in general, a workplace will be a permanent workplace if the worker goes to the same workplace:

  • in the course of a period of continuous work which lasts, or is likely to last, for more than 24 months, or
  • for all or almost all of the time for which the worker is likely to hold, or continues to hold, the same employment. This will normally be the case if the worker is employed to work at one place on a fixed term contract


Before 6 April 2016, workers engaged through an employment intermediary, such as an umbrella company, under an overarching contract of employment were able to claim a deduction for tax purposes and a NICs disregard on reimbursed expenses for journeys that would otherwise have been considered ordinary commuting if the worker had been engaged directly or on a temporary agency contract.

This was because the employment intermediary provided ongoing employment on the same terms and conditions, despite all the assignments being temporary contracts for different engagers. These arrangements meant each workplace fell within the statutory definition of a ‘temporary’ workplace (if they were for a period of less than 24 months) and a deduction for the cost of home to work travel and subsistence was allowed.

From 6 April 2016, the introduction of section 339A Income Tax (Earnings and Pensions) Act 2003 and related NICs provisions changed the treatment of travel and subsistence expenses for workers who provide their services through ‘employment intermediaries’ [ESM5550](, including recruitment agencies, umbrella companies, PSCs and other similar structures. From that date, when the relevant conditions [ESM5530]( are met then each assignment is considered to be a separate employment and each workplace is treated as a permanent workplace. This means workers will be regularly commuting to a permanent workplace for each assignment (ordinary commuting) and will not be eligible for tax relief on travel and subsistence expenses, nor will they be entitled to a NICs disregard on reimbursed travel and subsistence expenses.

Employment intermediaries travel expense provisions from 6 April 2016 - [ESM5510] onwards.

The treatment of travel and subsistence expenses:

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