Travel between places of work

A reimbursement of expenditure incurred by an employee in travelling between two or more places of work is not “earnings” and therefore not taxable.

This is because the expenditure would be an allowable claim if the employee had paid it out of their remuneration, as he or she would be travelling in the performance of their duties.

To establish what is a place of work, the employee has to show that he or she performs substantive duties at the place in question.

It is unlikely that an employee could successfully claim that their home is a place of work.

Travel between an employee’s home and a permanent workplace is “ordinary commuting” and the expenses of such journeys do not qualify for relief. This rule applies even when the employee does some of their work at home, and even if HMRC accept that they are entitled to relief for the additional expenses of working at home.

Since 6 April 2002, mileage payments which employers make to employees who use their own vehicle or bicycle for travel between two places of work are not chargeable to tax if they do not exceed the appropriate approved mileage allowance payment (AMAP) limit.

Payments that exceed the AMAP limit will be taxed to the extent that they exceed the limit.

Where employers pay mileage claims at rates per mile lower than AMAP rates, for work related journeys, then the difference can be claimed by the employee as an allowable expense.

The current AMAP rates are:

Cars and vans:

• First 10,000 business miles in a tax year – 45p per mile.
• Additional miles over 10,000 business miles in a tax year – 25p per mile.

Motorcycles: All business miles in a tax year – 24p per mile.

Bicycles: All business miles in a tax year – 20p per mile.