HMRC issued 'Travel and subsistence: discussion paper' last month. This is actually a new consultation document.

It follows on from HMRC's two stage Travel and subsistence review (July 2014 to March 2015) which in turn had followed the Office of Tax Simplification’s (OTS) January 2014 report on the tax treatment of employee benefits and expenses. Keep reading....

In the middle of the above was also a consultation paper: 'Employment Intermediaries: Temporary workers - relief for travel and subsistence expenses,' and this proposed abolishing the temporary travel and subsistence rules for Personal Service Companies (PSC) and agency temps. HMRC have yet to publish the responses to that paper however the introduction to the discussion paper does note "concerns that the employee temporary workplace rules drive tax planning and abusive behaviour and are distorting the labour market and working practices". It confirms that there will be separate new rules to combat perceived abuse by PSCs and agencies, however this consultation states that "the resultant legislation will be considered as part of this wider review."  

We assume that the new rules for PSCs are work in progress and that we will hear more on their fate shortly.

The latest proposals (our summary):

These are set to affect all employees except those who are engaged via employment intermediaries:

  • Relief should be available for business travel but not ordinary commuting.
  • Rules should not be based on the concepts of 'permanent' and 'temporary' workplaces.
  • Employees should not have their journeys to multiple locations or areas which are a significant distance apart all treated as being 'ordinary commuting'.
  • Relief should not be available for daytime subsistence where this is essentially akin to a private expense (night time subsistence can be a business expense though!).

Tax relief will be given for the costs of three types of journeys:

  • Journeys made necessarily in the performance of the duties of the employment.
  • Journeys to allow the employee to attend a location which is not the employee's main base but at which their attendance is a necessary part of their job.
  • Journeys to the employee's main base where all bases of the employee are detached duty locations.


Travelling in the performance of the duties: no changes to the existing rules.

Example: A lorry driver has to go to a depot to pick up their truck each day. They usually return to drop off the truck at the end of the day. The lorry driver would receive tax relief for all travel except travel to and from the depot, as this would be considered ’ordinary commuting’.

Travel to locations other than the employee's main base: new rules

The proposal adds the concept of a 'main base'.  A base is any location where an employee spends more than a specified percentage of their working time: a figure of 30% is proposed.

  • If an employee has only one base this would be the main base and relief would be allowed for home to work journeys to any location except that main base.
  • If an employee has more than one base, the new rules would specify which is their main base, possibly by allowing the employee to nominate.
  • If an employee has no base then they cannot have a main base and so all journeys would qualify for relief, including home to work travel.


An employed IT contractor working for a large firm has a number of clients across the UK. The contractor splits their time across multiple client’s premises four days in the week, usually working at a different location each day, and attends their employer’s main office every Friday.

  • Under the current rules the IT contractor's journey to and from their employer’s main office would not attract any relief, as it would be considered ordinary commuting. The IT contractor will usually get relief for journeys to a client’s premises, unless the project at those premises is expected to take more than 40% of their working time for more than 24 months.
  • Under this proposed rules, as the employee is not spending more than 30% of their time at any location, they would have no ‘base’ and therefore no ‘main base’. This means that their travel to and from their employer’s office would attract tax relief in addition to the travel to clients' premises.

Travel on detached duty: new rules to amend the temporary workplace rules

This proposal aims to to simplify the temporary workplace rule by introducing a whole new concept to the rules: "the detached duty" rule.

Detached duy means "working away from their normal work location". There are a number of ways in which detached duty can be defined: 

  • The task or job performed at that location is temporary (e.g. extra staff in a post room over Christmas - our example), or
  • The employee is only required to attend for a short time (e.g. maternity cover - HMRC example).
  • Attendance at the workplace, or the job being performed there would be of limited duration, which might be a time of say 24 months.
  • It is proposed for relief to be given for the first 24 months even if it were known from the outset that the placement would last for 3 years.
  • The main caveat to this rule would be that it would only apply where the employee does not have a normal (ie non-detached duty) base anywhere else. This is to prevent the situation of someone getting tax free travel to all of their workplaces by nominating their detached duty location as their ‘main base’, despite having another base elsewhere.
  • This bit of this discussion does not mention "personal service companies" however this rule is clearly targetting those businesses that HMRC considers are abusing the current temporary travel rules.

HMRC example: 

A project manager working for an IT firm is seconded to manage a project at a client’s premises for three years. They commute to the site from their home.

  • Currently the project manager would not qualify for any tax relief as they know from the outset that they will be at the location for more than 24 months (i.e. this is does not qualify as a temporary workplace).
  • Under the proposed rule, the client’s premises would be considered a detached duty location, as the task that they are performing is for a limited duration (the three years of the project). They would now qualify for relief on their travel to and from this location for the first 24 months, but not the remaining 12 months of the total three year period.

Our example: the PSC (if based on these rules)
Jim is the sole director and shareholder of his own company JimIT Limited. His office is based at home in Luton. His company works as a subcontractor on IT contracts for generally 2 to 3 years at a time in the City of London. Under the current rules he obtains tax relief for the cost of his jouneys in and out of London. Under the new rules even though his various contracting locations in London would be detached duty locations, the fact that he has a main base at his home office denies him tax relief. 

However, if he did not spend sufficient time at his home-office (prosposed at least 30% of his time) he could claim that  he had no base so under the detached duty rules he would claim tax relief on the first 24 months of travel for each London contract.

Other issues:

  • Homeworking: it is expected that homeworkers will be able to claim relief for travel expenses either on the basis that their home is their main base or that they have no base at all.
  • Work locations: currently, relief is not allowed for work journeys which are 'substantially the same as ordinary commuting', so relief would not be allowed for a journey from home to a client's premises which is on the same street as your normal workplace.  The proposed framework treats workplaces that are close together as a single work location and applies the rules to that work location rather than to each workplace individually.  The intention is for work location to be defined in a measurable way based on travel time, cost or distance for example.
  • Subsistence: the new rules will see an end to day subsistence where an employee on a business journey effectively receives a tax-free sandwich or meal.  Overnight subsistence is likely to remain deductible.

As this is a consultation it requires your comments by 16 December 2015.


There are a baffling number of webpages on this (links updated 20/10/15):

This current HMRC consultation: Travel and subsistence framework: discussion paper 

HMRC Review (this summarises the review to Spring 2015): Travel and subsistence review  

Other Consultation: Employment Intermediaries: Temporary workers – relief for travel and subsistence expenses closed on 10 February 2015.


Our related guides to current rules:

Travel (employer's guide)

Subsistence (employer's guide)

Travel rules for owner managers