Homeworking potentially jeopardised by proposed changes to tax relief on travel costs, warns tax body

Michael Steed, President of the ATT, said:

“The Government has published a discussion paper2 which proposes changes to the current, sometimes complicated, rules on travel and subsistence for employees and under these proposed changes, homeworkers, who make a significant contribution to Britain’s successful flexible labour market, may be denied tax relief on travel between their home work base and their employers’ work places.

“A good number of employees struggle to cope with a conventional 9am to 5pm office job either due to health or family reasons, whilst being able to recruit homeworkers can be vital for businesses which need to employ more staff, but do not have the space available to accommodate them. We would not wish to see any of these arrangements disturbed by a disadvantageous shift in the travel and subsistence rules.”

One of the Government’s proposals is that employees who work in more than one location for more than 30 per cent of their working time should be allowed to choose which one of those locations or bases is their main working base. They would then be unable to claim tax relief on the travel costs incurred on journeys between home and that agreed main base.

However, the Government also proposes to deny homeworkers the ability to choose their home as their main base, if they have a base somewhere else, such as their employer’s head office, therefore denying relief on travel between their work place at home and the head office.

Michael Steed said:

“It is unfair that homeworkers may not be allowed to nominate their home as their main base under the proposals. It could result in tax relief being denied on what is, in effect, legitimate business travel. This would leave either employers or employees out of pocket and could lead to some employees  giving up their jobs.

“The Government already supports homeworking by allowing employees who choose to work at home to be given up to £4 per week tax free from their employers, to help with the extra costs of working from home. It feels like a backward step to consider denying tax relief on travel costs in this way, given the increased trend in homeworking.

“We urge the Government to consider carefully the implications of their proposals.”

Notes for editors

1.       The ATT comments sent to HM Treasury 16 December 2015 on Travel and Subsistence can be  viewed here.

2.       To view the Government’s discussion paper click here

3.       The Association of Taxation Technicians

The Association is a charity and the leading professional body for those providing UK tax compliance services. Our primary charitable objective is to promote education and the study of tax administration and practice. One of our key aims is to provide an appropriate qualification for individuals who undertake tax compliance work. Drawing on our members' practical experience and knowledge, we contribute to consultations on the development of the UK tax system and seek to ensure that, for the general public, it is workable and as fair as possible.

Our members are qualified by examination and practical experience. They commit to the highest standards of professional conduct and ensure that their tax knowledge is constantly kept up to date. Members may be found in private practice, commerce and industry, government and academia.

The Association has over 7,700 members and Fellows together with over 5,600 students. Members and Fellows use the practising title of 'Taxation Technician' or ‘Taxation Technician (Fellow)’ and the designatory letters 'ATT' and 'ATT (Fellow)' respectively.