Travel expenses

Travel expenses

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Taxpayer is within IR 35. He lives in Northern Ireland and travels to work to a permanent workplace in the Republic of Ireland and back every week. He will be based there for over 2 years. His company reimburses the cost of travel to him. Can the cost of travel be claimed as a deduction from the deemed employment payment in step 3 under s 370 ITEPA. S 370 requires that the travel expenses be borne by the employer and included in the taxable earnings. However, the IR35 rules allow travel expenses only if they would have been deductible if the taxpayer had been employed by the client. The client has not borne these expenses and the deemed employment payment at step one is a notional amount which cannot be said to include any element of reimbursed expenses.
John Ward

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