Hybrid working – what counts as a business journey for tax purposes?

Understanding what constitutes a business journey for tax purposes in the era of hybrid working is crucial. HM Revenue and Customs (HMRC) has recently updated its guidelines to accommodate this new working model.

In essence, if an employee is required to work from home as part of their job, HMRC typically allows them to claim tax relief for travel expenses incurred when travelling from home to another workplace, like the office, for work-related duties.

However, HMRC only considers working from home necessary for the job if the employee needs specific tools or resources that are only available at home. If the employer provides suitable facilities elsewhere or if the employee chooses to work from home, HMRC doesn’t view it as a job requirement.

For example, let’s consider an area sales manager in Glasgow who needs to oversee a regional sales team across Scotland, but the nearest office is in Newcastle. Since she can’t practically go to the office and is required to keep client information secure at home, she can claim tax relief for her trips to Newcastle.

With the rise of hybrid work due to COVID and advancements in communication technology, many employers now offer their employees the option to work from home on a flexible basis. However, since this choice is voluntary, any journeys from home to the office are considered ordinary commuting and do not qualify for tax relief.

Employers need to be cautious, particularly when reimbursing staff for travel using approved mileage rates. Reimbursing home-to-office travel for employees who choose hybrid work can be seen as a benefit, requiring tax and national insurance deductions via payroll.

For more detailed information, you can refer to HMRC’s updated guidance.

Disclaimer: The information in this article is provided for general information only and does not constitute legal or professional advice. We cannot accept responsibility or liability for any actions you may take, or not take, based on this information.