Travel Expenses & the Overall Cost of Traveling to Work

Traveling to the workplace may now be extremely expensive for some employees. But, employers who help by reimbursing travel expenses could be creating an extra tax burden for themselves and their employees.

At Newnham & Son, we want to provide you with the most up-to-date tax information possible. Our goal is to help you plan for the future so that you can legally reduce your taxes. To find out more, contact our team of qualified financial experts today!

Why Travel Expenses From and To the Office Aren’t Tax Deductible

The journey between an employee’s home and their permanent workplace is ordinary commuting. As a result, these travel expenses are not a tax-deductible expense. If the employer pays the employee a mileage rate for ordinary commuting, that payment must be taxed as salary under PAYE. This also includes reimbursing bus or train fares.

Employers can pay a tax-free mileage allowance (up to 45p per mile) when the employee travels to a temporary workplace. The employer can also reimburse public transport costs in this instance. This is somewhere that the employee goes to perform a task of limited duration. Alternatively, it can be a location related to work for some other temporary purpose. For example, a care worker visiting a client at their home would travel to a temporary workplace.

A workplace is always a permanent workplace if you can’t prove that it is a temporary workplace.

An employee can have two or more permanent workplaces. For example, employees may work partly from home and partly at the company’s office. If the individual needs to attend the office for certain periods, say one day a week, the office and the employee’s home would both qualify as is a permanent workplaces.

Situations Where Travel Expenses To and From the Office Are Tax Deductible

Where the employment contract specifies that the individual works from home but they need to attend the office for specific meetings, the travel expenses to the office for those meetings is tax-deductible. Therefore, the employer can reimburse those travel costs to the employee.

Where the employee’s normal place of work changes (perhaps to their home) their employment contract needs to be updated with the location of the new permanent workplace. The updated employment contract should also clarify whether the employee now has two permanent workplaces.

Meet Tax Legislation Requirements With Our Help!

At Newnham & Son, we can help ensure that any assistance given to your employees meets the tax legislation requirements, including their travel expenses. Our team of highly qualified experts has extensive experience guiding clients around tax legislation requirements. To find out more or to get in touch with one of our team members, contact us today.