EIM32136 - Travel expenses: travel for necessary attendance: personal service companies: examples

Example 1

A computer expert provides his services through a company that he owns. He is the company’s only employee. Each year the company has around three contracts with different clients around the country to supply his services. He travels from home to work at the premises of his company’s clients.

Each place at which he works for his company’s clients will be a temporary workplace provided that he does not expect to spend more than 40% of his time for more than 24 months at any one site, see EIM32080.

Example 2

Jim lives in Brighton and is employed through an umbrella company under an overarching contract of employment.

His umbrella company arranges work for Jim at Crawley for 3 months in X Ltd’s warehouse, then in Portsmouth for a further 3 months for Y Ltd and then finally for Z Ltd at Eastbourne for one month. X Ltd, Y Ltd and Z Ltd are not connected companies. At all 3 locations he works under arrangements similar to an employee and is told what to do by the managers at each workplace. He is reimbursed for travel and subsistence costs from home to all 3 destinations (Crawley, Portsmouth and Eastbourne).

Jim is under the direction of the client at each workplace and isn’t entitled to tax or NICs relief for any of these journeys. The employment intermediaries travel expense provisions apply which means that each of these 3 locations would be treated as a separate employment and so all 3 locations would be classed as permanent workplaces. The payments Jim receives for travel expenses are treated as his earnings for tax and NICs purposes. See ESM5590.