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Employee Travel Expenses

I have been asked to review a decision by HMRC where they have disallowed the previous expense claims made on the basis that they represent ordinary commuting and not travel in the performance of employee's duties.

It is a very common situation where the individual is required by his employer to work on various building sites - which by their very nature are temporary. He rarely reports to head office - instead receiving instructions and work diary by phone - then travelling from home to site as instructed. His typical attendance would be from 5 to 15 days, but occasionaly up to 6 weeks and occasionally 7 or 8 per week where he'll finish mid day then travel to another site.

HMRC are quoting case law, seemingly superseding their own practice as set out in various examples within Guide 490 - Employee travel.

Any suggestions and/or am I missing something?


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10th Aug 2011 12:17

"HMRC are quoting case law"

You're not being terribly helpful to anyone wanting to appraise the situation.  Whilst you explain the client's circumstances (to an extent), there's no explanation of HMRC's argument that seems to me to be the nub of the issue.

What case law is it that they're quoting?

Booklet 490, and the examples therein, are not HMRC's "practice".  It's their (lengthy) interpretation of the (two pages of) law concerned.

I suspect, but can't say for certain, that their argument comes from S.339(8) ITEPA 2003:

"An employee is treated as having a permanent workplace consisting of an area if:

(a) the duties of the employment are defined by reference to an area (whether or not they also require attendance at places outside it),

(b) in the performance of those duties the employee attends different places within the area,

(c) none of the workplaces the employee attends in the performance of those duties is a permanent workplace, and

(d) the area would be a permanent workplace if ...[various preceding subsections]... referred to the area where they refer to a place."

That is that your client has a permanent workplace comprising the general geographic area in which he works.  See paragraphs 3.33 to 3.37 of 490, in particular the examples of Hilton onwards.


Sunshine Onerenidi

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09th Aug 2011 13:13

would agree with sunshine....

so you need to look at what the actual situation is vs what it looks like on paper - what does his contract say - is he in fact a area manager or something, or is it just that the job has developed such that he works in different sites.

And how big is the are he works, and is it defined within his contract - maybe if there is an area you can argue that at least some of the sites are actually outside of his 'normal' area and therefore some of the expenses are not 'ordinary commuting'

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10th Aug 2011 11:46

A second option needed?

These rules are tricky, you have a combination of hurdles to leap depending on the facts of the case. The basic rule is that travel from home to a temporary workplace is allowable however HMRC is presumably arguing that the journeys are all ordinary commuting as they are all similar distances, but you might also be on fixed term appointments (depending on the contract - written or implied) or perhaps HMRC is thinking about the sites being in one area so that the whole area becomes the workplace.

These cases are difficult because the so often turn on their individual circumstances.

You sound like you could do with assistance, please feel free to contact me.

Virtual tax support for accountants:

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