Working rule agreements

By Tolley
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The following Employment Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Working rule agreements
  • Working rule agreements

Working rule agreements

Working rule agreements are used in the construction industry and similar areas. They are national agreements made between trade unions and employers across the country, setting out the terms and conditions that apply to particular categories of hourly paid manual workers. The workers concerned are generally those whose work takes place at a succession of different sites rather than at the employer’s premises.

The agreements include details of what the employees should be paid in respect of daily travel and subsistence, overnight lodging allowances, etc, providing the employees with certainty about what to expect from their employers. However, without further guidance from HMRC, the tax position of the amounts covered by the agreements would remain uncertain. This is because the rules on deductibility of travel and subsistence allowance vary according to how long the employee works at a particular location and whether the employee has a permanent place of work other than the current site.

In order to help employees who receive payments under working rule agreements, HMRC has issued guidance in respect of travel and lodging expenses under those agreements, currently based on 13 agreements, as follows:

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