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Travel sickness
An employee who has to do a great deal of travelling on the job can normally be paid travel costs, subsistence and accommodation expenses without incurring a tax charge. That's as long as the travel is not "ordinary commuting". Ordinary commuting is the journey from home to your permanent place of work.
Recently, a worker fell foul of the details of the rules. He worked for different employers in a succession of different places. If he had worked for a single employer, following the same pattern of locations, there would have been no problem - he would not have had an "ordinary commute", because he had no permanent workplace. But he signed a separate contract with each employer in turn, so for each job, there was just one place he went to for the duration of that job. All his travel was ordinary commuting, and all his expenses were taxable income with no matching deduction.
That's a tough decision, though hard to fault in the law. Anyone who has that pattern of work needs to think about the way in which they will be taxed. Oddly, it is possible to get around this pitfall by forming a personal service company and working through that - the so-called "IR35" rules, which normally impose extra tax charges on personal companies, are more generous when it comes to travelling and subsistence expenses.
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The recent case was Phillips v Hamilton SpC 366. The Revenue have confirmed that the IR35 rules will be applied as if the worker had a single continuing employment with the
PSC, rather than successive separate employments with the underlying clients. As a result, travelling expenses should be deductible in this circumstance if a PSC is used, but not if the employment is direct.
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