Introduction

In order for travel expenses to be payable free of tax and NIC, they must meet definitions outlined in legislation. Ordinary commuting is, broadly, an employee’s travel between their home, or other place that is not a workplace, and their permanent place of work (see the Travel expenses for a definition of a permanent workplace). The phrase ‘ordinary commuting’ is used in the legislation; we’ll refer to it simply as commuting in this note. If an employee pays for commuting and the employer reimburses them, the reimbursement is earnings and the employer must operate PAYE income tax and Class 1 NIC on the full amount. Different reporting rules apply where the employer arranges or pays for the travel directly, as explained below.

Identifying commuting can be one of the most complex areas in employment tax. While it may be obvious what will be defined as commuting for a majority of employees travelling to work, such as when an employee travels to a single office every day, there are complex rules which govern what is commuting.