Expenses and benefits, travel and subsistence

This fact sheet relates to the tax implications of providing travel and subsistence expenditure to employees. Main issues are highlighted that can give you a fair idea if what is taxable and what is tax free.

EMPLOYEES WITH A PERMENANT WORKPLACE:

A workplace that the employees regularly attend is known as a permanent workplace. Tax relief do not cover journeys from home to permanent workplace or vice versa. Such journeys are categorised as ordinary commuting and the employee is responsible for bearing cost of them.

However full tax relief may be claimed relevant to business journeys made from one place of work to another, from home to a temporary work place or to home from a temporary workplace. Relief may also be unavailable for journeys which are similar to ordinary commuting journey. The similarity will be determined if the journey has similar route or train stations for the most part.

SUBSISTENCE PAYMENTS:

This will include accommodation and food/drink costs that the employee incurs while on a business trip away from permanent workplace. They are treated as part of the cost of business travel.

TEMPORARY POSTINGS:

If the employee has to work away from the permanent workplace for a substantial period of time, the new workplace will be regarded as temporary work place if:

Employee is posted there for less than 24 months
The employee spends less than 40% of his working time in case the posting is to be expected for more than 24 months.
All the time of the temporary posting the employee retains his original permanent workplace

SITE BASED EMPLOYEES:

Employees that work into construction industry or as safety Inspector, computer consultant or relief workers are site based employees who do not have any permanent workplace. They are posted at a particular site for several days, weeks or months on project basis and are moved to another site once project finishes. If such employees are paid travel and subsistence allowances or are reimbursed such expenses, they can claim for tax relief if period of stay at a particular site is expected to be or actually is less than 2 years.

Those temporary appointments where employees are generally required to perform duties at single workplace for most part of employment, will be excluded from tax reliefs. Such provisions are particularly targeted at avoiding manipulation of the 24 month limit rule through temporary recruitment.

OTHER EMPLOYEES WITH NO PERMANENT WORKPLACE:

Travelling and subsistence expenses incurred by employees, for whom travelling is an integral part of the job, will be deductible. Examples may include a travelling salesman.
Cost of journey related to travel from home to an office where a homeworking employee must regularly report are not an allowable expense. However, business travel between home and any other temporary workplace will be allowed.

HOW WE CAN HELP?

We can advise you regarding what travel and subsistence costs are covered by tax relief. We will help you draw a travel and subsistence package for your employees that do not result in large amount of tax liability.

Travel And Subsistence Expenses For Directors Or Employees

Quality Accessibility & Availability