Home to work travel Generally, there is no tax relief for the cost of travel between an employee’s permanent workplace and their home. However, for many years, relief has been given from any tax and NIC liability where the employer provides a late night taxi to take the employee home and the following conditions are satisfied: The employee is occasionally required to work later than ‘usual’ (at least until 9pm); These occasions are ‘irregular’ (a predictable pattern say, every Friday would not qualify for relief); The number of occasions in a tax year on which a taxi is provided is no more than 60; and By the time the employee can go home public transport has ‘ceased’; or It would not be ‘reasonable’ for the employer to expect the employee to use public transport Where all the above conditions are met the employee is not taxed if the employer provides or reimburses expenses incurred on a taxi or similar private road transport to take him or her home. There is no relief available if the employer does not reimburse the expenses as incurred by the employee. Something is ‘usual’ if it conforms to a common or habitual pattern. The exemption is intended to apply where an employee who normally finishes work before 9pm is required on occasion to work later than ‘usual’. This will depend on the case facts (time and attendance records for employee’s leaving time) and the employee’s established pattern of presence at their place of work. For an event to be deemed ‘irregular’ it has to be occasional and infrequent. Taxis provided once a week (even if the day varies) or daily, but only for a short fixed time period (say, a month), are still regarded as being a regular occurrence. The figure of 60 is not an annual allowance. Its effect is to place a ceiling on the number of qualifying journeys where all late working conditions are satisfied, not just the first 60 occasions in a year when a taxi is provided. If a work to home journey requires the use of more than one form of public transport, such as rail and bus and one of these forms is no longer available, HM Revenue & Customs (HMRC) accepts that transport has ‘ceased’ for the whole journey. HMRC also accepts that where a journey made after 9pm by public transport is likely to take over an hour longer than a normal journey between work and home, it will be not be reasonable for the employee to use public transport. The circumstance must demonstrate a significant difference from the normal situation to satisfy the ‘reasonable’ test, this includes any employee personal safety considerations. The employer must have the necessary management checks in place and keep sufficient records to show that all the qualifying conditions have been met. For the avoidance of doubt, HMRC are to reissue guidance on the use of late night taxis in the Employment Income Manual at: www.hmrc.gov.uk/manuals/eimanual/EIM21831.htm. Paul Tew, Pay Magazine Snowdrop provides a range of Payroll solutions that are fast, flexible and easy-to-use, to suit the many and varied needs of each organisation. To find out more about the software and services that we provide, please click here >>