Home leave and employee travel

By Tolley
Employment_tax_img2

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

  • Home leave and employee travel
  • Home leave
  • General employee travel
  • Travel to and from the UK for non-domiciled employees working in the UK
  • Accompanying family
  • Family visits
  • UK resident employees whose duties are wholly outside the UK
  • UK resident employees with more than one job outside the UK
  • Employer-provided travel where employee’s duties are overseas
  • Travel (including home leave) during an employment with overseas duties
  • Travel by visiting family members
  • PAYE

Home leave

Home leave is a general term used to describe the situation where an employee works in a foreign country, but remains liable to UK income tax on earnings by virtue of remaining resident in the UK, and travels back to his home country during that overseas assignment. If the employer provides or pays for travel and subsistence to enable the employee to take home leave, the normal rules apply (unless one of the special provisions described below apply). This means that unless the reliefs below apply, the cost of the travel and subsistence provided or the amount reimbursed to the employee is likely to be taxable on the employee (see the Expenses guidance note).

General employee travel

The general rules on travel and subsistence apply equally to all employees, whether or not there is an international aspect to their employment. This means, broadly, that the cost of travel necessarily undertaken in the performance of the employee’s duties qualifies for a deduction. See the Travel expenses and Subsistence expenses guidance notes for more detailed information on the general rules.

ITEPA 2003, ss 336–340

If the employee is making only a short business trip away from his home country, or taking a short-term secondment to another country, the destination is likely to count as a temporary workplace. Under the general rules, travel to and from a temporary workplace, and any subsistence costs incurred as a result of having to stay at that temporary workplace are allowable as a deduction. See the Expenses during secondments guidance note.

These general rules should always be considered first. Only if the employee’s travel expenses are not allowable under those rules is there any need to look at the special rules concerning cross-border travel, as described below. There is a rule in ITEPA 2003, s 330 which prevents a deduction being

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