Commuting expenses

Produced by Tolley in association with Philip Rutherford

The following Employment Tax guidance note Produced by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:

  • Commuting expenses
  • Introduction
  • Ordinary commuting
  • Where is a permanent workplace?
  • What constitutes ‘ordinary commuting’?
  • Fixed contracts
  • Rotations
  • What travel expenses are allowable?
  • Travel to a temporary workplace
  • One-off visits
  • More...

Commuting expenses


In order for travel expenses to be allowable expenses for tax purposes they must meet the strict definitions outlined in legislation. Ordinary commuting is excluded by specific legislation and in general terms, expenses relating to an employee’s travel between his permanent residence and his permanent place of work cannot be relieved.

If an employee is reimbursed for expenses relating to ordinary commuting expenses then these are taxable as a benefit on the employee through the operation of payroll. There are separate reporting requirements depending on the nature of the reimbursement and these are discussed at the end of this guidance note.

The specific legislation regarding ordinary commuting is found at ITEPA 2003, s 338(3).

Note that following on from recommendations made by the Office of Tax Simplification, and a subsequent review of the travel and subsistence rules, in September 2015 the Government published a discussion paper about a proposed framework for the tax treatment of travel and subsistence expenses. The Government has yet to set a timetable for the introduction of any changes to the existing legislation but it seems likely that the rules will change at some point. Further to these proposals, the Government has published a discussion paper (March 2016) and a call for evidence (May 2017) in an attempt to work out how best to rationalise and simplify the taxation of travel and subsistence. Unfortunately the proposed simplification of travel and expenses has not progressed and most employers need to continue to operate within the travel and expense rules which have been in place since 1998.

One of the most complex areas regarding travel and expense and an area often fraught with difficulty for an employer is the area of when travel is ordinary commuting. While it may be obvious, such as when an employee travels to a single office every day, there are a number of complex rules which govern what is ordinary commuting. A mobile employee who has a desk in an

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