Employment intermediaries: travel and subsistence

By Tolley

The following Employment Tax guidance note 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


In a move to restrict the ability of those working through intermediaries to claim travel and subsistence expenses unavailable to ordinary employees, the Government has introduced new rules (the ‘EI travel rules’).

ITEPA 2003, ss 339A, 688B

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 the new EI travel rules, workers providing their services through an intermediary, such as a personal services company or an umbrella company, could treat all the separate locations at which they carried out each engagement 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, exceptionally, an engagement was more than two years in duration.

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

Each engagement to be regarded separately

Where new 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, thereby preventing a claim for relief for the costs of home to work travel to that location.

If, during the course of such an engagement, the worker supplies services at

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