Employment intermediaries: travel and subsistence

Produced by Tolley

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

  • Employment intermediaries: travel and subsistence
  • Introduction
  • Background
  • Each engagement to be regarded separately
  • Who is affected?
  • Exclusions
  • Supervision, direction or control (‘SDC’)
  • Anti-avoidance
  • Key impacts on intermediaries and their workers

Employment intermediaries: travel and subsistence


In a move to restrict the ability of those working through intermediaries to claim travel and subsistence expenses unavailable to ordinary employees, the Government introduced specific rules for travel and subsistence for intermediaries from 6 April 2016.


The costs of travel and subsistence are an allowable deduction for employees only if the travel is to or from a place other than the employee’s permanent workplace in order for the employee to perform the duties of his employment. The costs of commuting between the employee’s home and a permanent workplace are not deductible (see the Travel expenses and Commuting expenses guidance notes).

Before introduction of these rules, workers providing their services through an intermediary, such as a personal services company (PSC) or an umbrella company, could treat the locations at which they carried out separate engagements as temporary workplaces of their employment under that intermediary. This then enabled such workers to claim tax relief for costs of commuting between home and their workplace unless, an engagement was more than two years in duration or to consist of all or most of that employment ― ie an agency worker who was only placed once by that agency could not claim these expenses, but if they had multiple placements in different places with different clients, all but the last placement would qualify as a temporary workplace and therefore travel and subsistence expenses could be reimbursed free of tax and NIC.

From 6 April 2016, the rules changed, greatly reducing the travel expenses that individuals who work via employment intermediaries can claim against tax.

Each engagement to be regarded separately

Where ITEPA 2003, s 339A applies, each engagement undertaken by an employee of an employment intermediary (such as an umbrella company) is treated, for the purposes of the travel and subsistence rules in ITEPA 2003, ss 338–339, as if it were a separate employment so that each separate place of work becomes a permanent workplace for the individual,

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